THE UNIVERSITY OF HULL

A Comparative Study of Ports and Their Hinterlands:

Factors Determining Port Performance and Choice

A thesis submitted for the degree of

Doctor of Philosophy

By
Mengying Feng

2010

ACKNOWLEDGEMENTS
This thesis could not have been completed without the support of many people.
First of all, I would like to address my heartfelt gratitude to my supervisors, Professor
Chandra Lalwani and Professor John Mangan, who have made my PhD journey
possible. Without their granting me a scholarship, it would not have been possible for
me to even start the PhD journey. I would also like to thank Professor Mike Jackson for
his supervision in my first year. I would like to extend my thanks to my supervisors for
their guidance, encouragement and supervision during my PhD process. I will never
forget the supervision meetings in the evenings and at weekends, when they should
have been taking a break with their families. In particular, I owe Professor John Mangan
a debt of gratitude for his helping me as a charitable service thanks for his still helping
me after he moved to Newcastle. Without my supervisors help and support, the thesis
could have never been completed.
Secondly, I am grateful to a number of people, especially to Professor Chee Wong in
HUBS for his comments on my work. Chee is always very helpful when the need arises.
Thanks should also go to Ms. Rebecca E Conyers who helped me a great deal in
administration, to my friends Daxi Huang and Dongmei Yang for their encouragement
and to my fellow PhD students such as Khalid Albattal who have shared with me the
ups and downs and encouraged me to carry on with the PhD journey. Special thanks
should also go to the interviewees and questionnaire survey respondents. Without their
participation, the thesis could not have been written as there would have been no
empirical data.
Lastly, I must express my deepest appreciation to my dearest family, especially my
husband Simon Yan and my daughter Tan Yan, for their unconditional love and support
throughout my PhD journey. Without my husbands financial and emotional support, I
could not have left my motherland and come to the UK to study. My lovely daughter
has shown her ability to support me by behaving herself very well without me around.
Their sacrifices and continuous support have encouraged me to study in the UK for over
five years until finally I completed the journey.

ii

ABSTRACT
As a consequence of globalisation, port performance has become increasingly important
for international trade. Different port regions perform differently. The aim of this
research is to identify factors that determine port performance and choice in a
comparative study between two case ports in Europe and Asia. Specifically, this
research aims to examine factor differences between two European and Asian ports
contexts; to identify the key factors that drive port performance and choice; to
investigate the differences in importance and performance among the factors; to analyse
how the importance and performance of factors varies for different ports; to analyse the
role a port hinterland plays in port performance and choice; and to illustrate the
usefulness of key findings for port stakeholders.
The construct of importance factors is based on the literature. The research
methodology was that of mixed methods to collect both qualitative and quantitative data
in two port regions (China and UK) and was carried out in two phases. Phase one
comprised semi-structured in-depth interviews. Phase two consisted of questionnairebased surveys to validate the factors influencing port performance. The questionnaire
surveys were distributed to port experts from 500 organisations and had a 50.8%
response rate. Thematic analysis was used for qualitative data analysis of the data from
the interviews. Methods for analysis of the data from the questionnaires included
descriptive analysis, factor analysis, t-test, Kruskal-Wallis H test, importanceperformance analysis and other statistical validation and significance tests.
The findings of this research suggest that ports wishing to outperform competitors can
do so by improving the factors that are of high importance but currently perform poorly.
This could also be achieved by improving performances on shipping services, shipping
prices, overall logistics cost, logistics services and government support in descending
order which is based on factor evaluation in this research. The thesis further analyses
this result within the context of urgent, salient and basic factors based on IPA, including
explicit & implicit importance. Shipping services and cost have a critical effect on port
performance. Differences in port charges are the most significant differences in factor
importance at the case ports of the Humber and Xiamen. Government support has the
most significant differences in factor performance between the two case ports.
This research is not without limitations. The analysis was restricted to two port regions
in China and the UK and data used in this research were mainly generated from
interviews and questionnaire surveys, responses to which are to some extent subjective.
iii

TABLE OF CONTENTS
ACKNOWLEDGEMENTS ............................................................................................ ii
ABSTRACT .................................................................................................................... iii
TABLE OF CONTENTS ............................................................................................... iv
LIST OF TABLES ....................................................................................................... viii
LIST OF FIGURES ....................................................................................................... ix
LIST OF ABBREVIATIONS ........................................................................................ x
1. INTRODUCTION ................................................................................................... 1
1.1 Background to the research ..................................................................................... 1
1.1.1 Overview .......................................................................................................... 1
1.1.2 Previous research ............................................................................................. 2
1.2 The research gap, aim and objectives ..................................................................... 7
1.3 Significance of the study ......................................................................................... 9
1.4 Methodology ......................................................................................................... 10
1.5 Outline of the thesis .............................................................................................. 13
2. LOGISTICS, SUPPLY CHAIN MANAGEMENT AND PORTS .................... 15
2.1 Defining logistics and supply chain management ................................................. 15
2.1.1 Definition of Logistics ................................................................................... 15
2.1.2 Definition of supply chain management ........................................................ 17
2.1.3 Relationship between logistics and SCM ....................................................... 18
2.2 Ports and global logistics chains ........................................................................... 20
2.2.1 Ports in global logistics chains ....................................................................... 20
2.2.2 Port activities.................................................................................................. 22
2.2.3 Port development and port generations .......................................................... 23
2.2.4 Port functions, roles and role change ............................................................. 25
2.2.5 Port hinterlands .............................................................................................. 27
2.3 Relevant theories underpinning port performance ................................................ 30
2.3.1 Stakeholder theory ......................................................................................... 30
2.3.2 SCP paradigm ................................................................................................ 30
2.3.3 PESTEL analysis............................................................................................ 31
2.3.4 Three-factor theory ........................................................................................ 32
2.4 Trends in maritime freight transport ..................................................................... 32
2.4.1 Upscaling of vessel size ................................................................................. 32
2.4.2 Shifts in supply chains and port logistics integration .................................... 34
2.4.3 Global port/terminal operators (GPOs) .......................................................... 37
2.4.4 Powerful port users ........................................................................................ 39
2.4.5 An increased focus on landside and intermodality ........................................ 40
2.4.6 Port-centric logistics ...................................................................................... 42
2.4.7 Port ownership and privatisation.................................................................... 43
2.4.8 Green logistics and the supply chain .............................................................. 45
2.5 Challenges ............................................................................................................. 45
2.6 Chapter summary .................................................................................................. 47
3. MEASURING PORT PERFORMANCE AND FACTORS INFLUENCING
PORT PERFORMANCE ............................................................................................. 48
3.1 Components of a logistics system for ports .......................................................... 48
3.1.1 Institutional framework .................................................................................. 49
3.1.2 Transport and communications infrastructure ............................................... 51
3.1.3 Cargo interests................................................................................................ 52
3.1.4 Public and private service providers .............................................................. 52
iv

3.2 Measuring port performance ................................................................................. 52

3.2.1 Importance of performance measurement ...................................................... 52
3.2.2 National and regional logistics key performance indicators .......................... 53
3.2.3 Trading logistics KPIs .................................................................................... 55
3.2.4 Port performance indicators ........................................................................... 56
3.3 Factors contributing to success of ports ................................................................ 68
3.3.1 Unique geographical conditions..................................................................... 69
3.3.2 Landside connectivity linking hinterlands ..................................................... 70
3.3.3 Port technical infrastructures ......................................................................... 71
3.3.4 Efficient port services .................................................................................... 71
3.3.5 Logistics demand in the hinterlands............................................................... 72
3.3.6 Government support ....................................................................................... 74
3.4 Criteria for port competitiveness and port choice ................................................. 75
3.5 Factors influencing port performance ................................................................... 82
3.6 Chapter summary .................................................................................................. 85
4. METHODOLOGY................................................................................................ 86
4.1 Summary of research objectives ........................................................................... 86
4.2 Research design ..................................................................................................... 87
4.2.1 Research philosophies: positivism, interpretivism and pragmatism .............. 88
4.2.2 Research approaches ...................................................................................... 90
4.2.3 Research strategy: survey............................................................................... 92
4.2.4 Research methods .......................................................................................... 93
4.2.5 Research context ............................................................................................ 96
4.2.6 Research process ............................................................................................ 97
4.3 Discussion of current research methods .............................................................. 100
4.3.1 Semi-structured interviews .......................................................................... 100
4.3.2 Questionnaire survey.................................................................................... 103
4.3.3 Other data collection .................................................................................... 107
4.4 Choice of research locations and interviewees ................................................... 108
4.4.1 Selection of research locations ..................................................................... 108
4.4.2 Selection of interviewees ............................................................................. 112
4.5 Data analysis and interpretation .......................................................................... 117
4.5.1 Qualitative data analysis .............................................................................. 117
4.5.2 Quantitative data analysis ............................................................................ 120
4.5.3 Validity and reliability ................................................................................. 121
4.6 Importance-performance analysis ....................................................................... 123
4.6.1 Origin of IPA ............................................................................................... 123
4.6.2 Employment of IPA ..................................................................................... 124
4.6.3 Development of IPA .................................................................................... 125
4.6.4 Summary of IPA .......................................................................................... 134
4.7 Ethical issues ....................................................................................................... 135
4.8 Chapter summary ................................................................................................ 135
5. EXPLORING THE DEVELOPMENT OF PORT PERFORMANCE: PORT
STAKEHOLDERS VIEWS ...................................................................................... 137
5.1 Geographical location and proximity .................................................................. 137
5.2 Government support ............................................................................................ 142
5.3 Port technical infrastructure ................................................................................ 147
5.3.1 Port facilities ................................................................................................ 147
5.3.2 Information and communication technology system ................................... 150
5.4 Landside transport infrastructure ........................................................................ 150
v

5.5 Seaside connections ............................................................................................ 154

5.6 Logistics cost ....................................................................................................... 154
5.7 Logistics demand ................................................................................................ 157
5.8 Logistics services ................................................................................................ 159
5.8.1 Customs and other border services .............................................................. 159
5.8.2 Skills............................................................................................................. 161
5.8.3 Speed of cargo handling ............................................................................... 162
5.8.4 Risks and safety ........................................................................................... 163
5.8.5 Services by logistics service providers ........................................................ 163
5.9 Port ownership .................................................................................................... 163
5.10 Environmental concerns .................................................................................... 164
5.11 Politics ............................................................................................................... 166
5.12 History ............................................................................................................... 167
5.13 Culture ............................................................................................................... 168
5.14 Other factors to improve port performance ....................................................... 171
5.15 Chapter summary .............................................................................................. 172
6. FACTORS
INFLUENCING
PORT
PERFORMANCE:
PORT
STAKEHOLDERS VIEWSQUESTIONNAIRE ANALYSIS ............................. 175
6.1 Data screening, cleaning and sample characteristics .......................................... 176
6.1.1 Data screening and cleaning ........................................................................ 176
6.1.2 Sample characteristics .................................................................................. 177
6.2 Techniques chosen for data analysis ................................................................... 183
6.3 Descriptive and distribution statistics ................................................................. 186
6.4 Factor analysis ..................................................................................................... 190
6.4.1 Justification of factor analysis ...................................................................... 190
6.4.2 Choice of factor analytic techniques ............................................................ 192
6.4.3 Extraction method ........................................................................................ 192
6.4.4 Choice of rotation method............................................................................ 192
6.4.5 Decision on the number of factors ............................................................... 193
6.4.6 The significance of factor loadings .............................................................. 196
6.4.7 Results of factor analysis ............................................................................. 196
6.4.8 Factor validity .............................................................................................. 197
6.5 Comparative analysis .......................................................................................... 199
6.5.1 Importance comparison ................................................................................ 200
6.5.2 Performance comparison.............................................................................. 202
6.5.3 Performance difference between the case ports and other ports .................. 205
6.5.4 Difference between (C-B) of the Humber/Xiamen and other ports .......... 207
6.5.5 Importance and performance analysis .......................................................... 208
6.5.6 Differences among different respondent groups in importance and
performance recognition ....................................................................................... 222
6.5.7 Overall comparative analysis ....................................................................... 224
6.6 Comments from respondents............................................................................... 226
6.6.1 Factors influencing port performance .......................................................... 226
6.6.2 The performance of the Humber and Xiamen ports .................................... 228
6.6.3 Overall comments ........................................................................................ 228
6.7 Chapter summary ................................................................................................ 229
7. DISCUSSION ON FACTORS INFLUENCING PORT PERFORMANCE . 232
7.1 Key factors determining port performance and choice ....................................... 232
7.1.1 Key factors cross-validated by a questionnaire and interviews ................... 232
7.1.2 Other key factors influencing port performance .......................................... 240
vi

7.1.3 A proposed framework for IPA ................................................................... 245

7.1.4 Section summary .......................................................................................... 246
7.2 Differences in importance and performance among the important factors ......... 246
7.2.1 Importance difference among the important factors .................................... 246
7.2.2 Performance difference among the factors .................................................. 247
7.3 Variance in factor importance and performance for different ports ................... 248
7.3.1 Variance in factor importance for different ports ........................................ 248
7.3.2 Variance in factor performance for different ports ...................................... 253
7.3.3 Differences between factor importance and performance ........................... 257
7.4 The role of a port hinterland in port performance and choice............................. 257
7.5 Usefulness of key findings for port stakeholders ................................................ 259
7.6 Difference between findings and the literature ................................................... 267
8. CONCLUSION AND RECOMMENDATIONS .............................................. 269
8.1 Key findings ........................................................................................................ 269
8.1.1 Key findings from the combined sample ..................................................... 270
8.1.2 Key findings from the analysis of separate data of the Humber and Xiamen
............................................................................................................................... 272
8.2 Achievement of five research objectives ............................................................ 275
8.2.1 Key factors that drive port performance and choice .................................... 275
8.2.2 Differences in importance and performance among the factors .................. 276
8.2.3 How the factor importance and performance vary for different ports ......... 276
8.2.4 The role of a port hinterland in port performance and choice ..................... 276
8.2.5 Usefulness of the key findings for port stakeholders ................................... 276
8.3 Research contribution.......................................................................................... 277
8.3.1 Contributions to academic knowledge ......................................................... 277
8.3.2 Contributions to port management ............................................................... 281
8.3.3 Contributions to research methodology ....................................................... 282
8.4 Limitations of this research and recommendations for future research .............. 282
REFERENCES ............................................................................................................ 284
APPENDIX: QUESTIONNAIRE .............................................................................. 305

vii

LIST OF TABLES
Table 2. 1Port-related activities.................................................................................................................. 23
Table 3. 1 Indicators Worldwide Bank LPI................................................................................................ 55
Table 3. 2 Port performance indicators by Wu and Zong (2004) ............................................................... 57
Table 3. 3 Additional port performance indicators..................................................................................... 58
Table 3. 4 Cost components ....................................................................................................................... 61
Table 3. 5 Efficiency indicators of port performance ................................................................................. 64
Table 3. 6 Background of some ports with good performance................................................................... 69
Table 3. 7 Components of port competitiveness (adapted from Yeo et al. 2008) ...................................... 76
Table 3. 8 Port competitiveness index by Ma (2007) ................................................................................. 82
Table 3. 9 Factor choice for empirical research ......................................................................................... 85
Table 4. 1 Positivism vs. interpretivism ..................................................................................................... 88
Table 4. 2 Research phases ........................................................................................................................ 92
Table 4. 3 Research methods used in port research .................................................................................... 94
Table 4. 4 Stages of this research (adapted from Stuart et al. 2002) .......................................................... 98
Table 4. 5 Characteristics of the Humber and Xiamen ports .................................................................... 111
Table 4. 6 Profile of interview participants .............................................................................................. 115
Table 4. 7 Questionnaire distribution profile ........................................................................................... 116
Table 4. 8 Literature on importance and performance analysis ................................................................ 125
Table 5. 1 Number of interviewees who raised factors that drive port performance ................................ 137
Table 5. 2 Age profile for Xiamen logistics management team ............................................................... 161
Table 5. 3 Education profile for Xiamen logistics management team ..................................................... 162
Table 6. 1 Questionnaire distribution and response ................................................................................. 178
Table 6. 2 Respondents by job roles (combined samples) ....................................................................... 180
Table 6. 3 Respondents by response method............................................................................................ 180
Table 6. 4 Abbreviation and item explanation ......................................................................................... 182
Table 6. 5 Test of normality ..................................................................................................................... 185
Table 6. 6 Descriptive and distribution statistics ...................................................................................... 188
Table 6. 7 Mean descending order of 45 factors for combined sample .................................................... 189
Table 6. 8 Mean descending order of 45 factors for both of the Humber and Xiamen ............................ 190
Table 6. 9 Correlations of factors in Section A ........................................................................................ 191
Table 6. 10 KMO and Bartletts Test for importance factors ................................................................... 191
Table 6. 11 Total Variance Explained ...................................................................................................... 194
Table 6. 12 Rotated Component Matrix with loadings on each factor (combined samples) .................... 195
Table 6. 13 Reliability Statistics............................................................................................................... 198
Table 6. 14 Correlations between aggregate factors................................................................................. 198
Table 6. 15 Factor comparison by mean in descending order (D.O.= descending order) ........................ 199
Table 6. 16 Overview of factor importance comparison .......................................................................... 201
Table 6. 17 Factors with significant/insignificant difference between HB and XM importance ............. 202
Table 6. 18 Factors with significant /insignificant difference between HB and XM performance .......... 204
Table 6. 19 Factor performance comparison ............................................................................................ 206
Table 6. 20 Performance difference comparison across regions by factors ............................................. 208
Table 6. 21 Significant/insig difference between factor importance and performance ............................ 209
Table 6. 22 Spearman correlation between importance and performance ................................................ 211
Table 6. 23 Comparison of importance rankings between explicit and implicit importance ................... 211
Table 6. 24 Cohens guidelines for correlation interpretation ................................................................. 212
Table 6. 25 Categories from traditional IPA ............................................................................................ 214
Table 6. 26 The Humber mean importance ratings and identifying salient factors .................................. 218
Table 6. 27 Xiamen mean importance ratings and identifying salient factors ......................................... 218
Table 6. 29 Significant difference between pairs of company groups ..................................................... 223
Table 6. 29 Significant/insignificant difference comparison summary by factor ..................................... 225
Table 6. 30 Respondents profile over open questions ............................................................................. 226
Table 7. 1 Performance issues of the Humber and Xiamen ..................................................................... 254
Table 7. 2 Throughput of main container ports close to Xiamen in 2009 ................................................ 259
Table 7. 3 Strategies of the Humber and Xiamen subject to revised IPA results by 3-factor theory ....... 260
Table 7. 4 The Humber and Xiamen implications for port managers ...................................................... 260

viii

LIST OF FIGURES
Figure 1. 1 Research route map (RO: research objective) .......................................................................... 11
Figure 2. 1 Relationships between logistics and SCM concept .................................................................. 18
Figure 2. 2 Four phases of port development ............................................................................................. 24
Figure 2. 3 Port generations ....................................................................................................................... 24
Figure 2. 4 Port functions ........................................................................................................................... 25
Figure 2. 5 Structure-conduct-performance, adapted from Bain (1956) .................................................... 31
Figure 2. 6 PESTEL analysis model .......................................................................................................... 31
Figure 2. 7 Six generations of container ships ........................................................................................... 33
Figure 2. 8 Top 10 container operators by TEU in Nov. 2009 ................................................................... 35
Figure 3. 1 Categories of port performance indicators ............................................................................... 59
Figure 3. 2 Trends in connectivity indicators-Index of country ................................................................. 62
Figure 3. 3 Categories of factors influencing port performance ................................................................. 83
Figure 4. 1 The research design onion .................................................................................................... 87
Figure 4. 2 Research process ...................................................................................................................... 98
Figure 4. 3 Process of qualitative data analysis ........................................................................................ 118
Figure 4. 4 Importance-performance grid ................................................................................................ 124
Figure 4. 5 Importance-performance matrix zones .................................................................................. 128
Figure 4. 6 Importance-performance analysis .......................................................................................... 129
Figure 4. 7 The importance grid ............................................................................................................... 133
Figure 4. 8 Integrated importance-performance analysis framework ...................................................... 134
Figure 5. 1 Location of the Humber and Xiamen in the world................................................................. 138
Figure 5. 2 Location of the Humber (source: Google-Map) ..................................................................... 138
Figure 5. 3 Locations of Xiamen .............................................................................................................. 139
Figure 6. 1 Chapter structure .................................................................................................................... 176
Figure 6. 2 Respondents profile by company type over all responses (combined samples) ..................... 178
Figure 6. 3 Respondents profile by company type and region (frequency) .............................................. 179
Figure 6. 4 Humber/Xiamen respondents profile by company type and region (%) ................................ 179
Figure 6. 5 Frequency/% of respondents with different positions (combined samples) ........................... 180
Figure 6. 6 Response method (combined samples) .................................................................................. 181
Figure 6. 7 Overview of mean comparison .............................................................................................. 189
Figure 6. 8 Scree Plot ............................................................................................................................... 194
Figure 6. 9 Structure for factors influencing port performance ................................................................ 197
Figure 6. 10 Importance comparisons between HB, XM and combined sample ..................................... 201
Figure 6. 11 Performance comparisons between HB, XM and combined sample ................................... 203
Figure 6. 12 Combined traditional IPA .................................................................................................... 212
Figure 6. 13 The Humber traditional IPA ................................................................................................ 213
Figure 6. 14 Xiamen traditional IPA ........................................................................................................ 214
Figure 6. 15 Combined sample importance vs. performance ................................................................. 215
Figure 6. 16 The Humber importance vs. performance (the Humber vs. other ports) ........................... 216
Figure 6. 17 Xiamen importance and performance (Xiamen ports vs. other ports) ............................... 217
Figure 6. 18 Combined sample basic, performance and excitement factors (by Spearman) .................... 219
Figure 6. 20 Xiamens basic, performance and excitement factors by Spearman .................................... 220
Figure 6. 21 The Humber comparison overview ...................................................................................... 224
Figure 6. 22 Xiamen comparison overview ............................................................................................. 225
Figure 7. 1 Research flow and factors influencing port performance and choice by combined sample .. 233
Figure 7. 2 Comprehensive process of getting key factors ....................................................................... 245
Figure 7. 3 Factor importance and performance comparison for different ports ...................................... 249

ix

LIST OF ABBREVIATIONS
AAPA
ABP
AHP
ANOVA
ASEAN
CILT
CSCMP
DFT
EDI
E-E
EU
FA
FDI
FTZ
GDP
GPO
GPS
GRT
GST
GVA
HB
IC
ICT
IT
IPA
IPO
KMO
KPI
LPI
LSCI
LSP
M&As
MNC
NAICS
NVA
NVQ
NRT

American Association of Ports Authorities

the Association of British Ports
Analytical Hierarchy Process
Analysis of Variance
the Association of South-East Asian Nations
Chartered Institute of Logistics and Transport
Council of Supply Chain Management Professionals
Department for Transport
electronic data interchange
Europe-Europe
European Union
factor analysis
foreign direct investment
free trade zone
gross domestic product
global port operator
global positioning satellite
gross registered ton
Goods and Services Tax
gross value added
The Humber
Identification Card
information and communications technology
information technology
importance-performance analysis
international port operator
Kaiser-Meyer-Oklin
key performance indicators
logistics perception indicator
Liner Shipping Connectivity Index
logistics service providers
mergers and acquisitions
Multinational Corporation
North American Industry Classification System
net value added
National Vocational Qualification
net registered ton
x

PCA
principal component analysis
PESTEL
Political, Economic, Social, Technical, Environmental and Legislative
PPI
port performance indicator
PRD
Pearl River Delta
PSP
port service provider
RDA
regional development agency
RDC
regional distribution centre
RMB
Renminbi, Chinese currency
SCM
supply chain management
SD
standard deviation
SPSS
Statistical Package for the Social Sciences
TW
Taiwan
TEU
Twenty-Foot Equivalent Units
UNCTAD
United Nations Conference on Trade and Development
VAL
value added logistics
WTO
World Trade Organisation
XM
Xiamen
YRD
Yangtze River Delta
3PL
Third Party Logistics
(C-B) performance difference between the local ports and other ports
The Humber The Humber ports

xi

1. INTRODUCTION
1.1 Background to the research
1.1.1 Overview
Globalization and the entry of more nations to the World Trade Organisation (WTO)
have fuelled growth in seaborne trade. A United Nations Conference on Trade and
Development (UNCTAD 2009) report shows that the worlds total merchandise trade
value reached 8.02 billion tons of goods loaded, a volume increase of 4.8% over 2006.
An increasing growth in world trade generally increases the demand for international
shipping services (Michaelowa and Krause 2000). This has been witnessed in the
container shipping industry in the past few decades.
Before the economic recession began in 2008, trade growth had caused corresponding
cargo container movements to increase in excess of overall economic growth for
decades. The shipping lines had thus become busier and port operators had to strive to
meet the rapidly expanding needs of customers. The economic recession has had some
negative influence on the international trade; however, the world is recovering from the
recession, as announced by Premier Jiabao Wen in the Asia-Europe Summit on 5th Oct.
2010 (www.news.xinmin.cn). This implies that the trade volume will rise again.
Increasing environmental consciousness may also fuel the demand for transportation by
ship as water transport consumes relatively less fuel than other transport modes such as
rail and road (Wu and Dun 1995).
Maritime logistics is generally preferred to transport trade cargoes also because it can
provide cheap and high volume transport for customers (Tseng et al. 2005; Lagoudis et
al. 2006). Being capital intensive, technology intensive and high value-added, ports
have a top priority for trade and economic improvement, as ports are in the
transportation interface between land and water. They are in a special position in the
integrated logistics service chain and play an increasingly important role in supply
chains and logistics processes to cope with trade (Bichou and Gray 2004; Zhang 2005;
Bryan et al. 2006). They attract the greatest amounts of cargoes and take the largest
share of cargo transportation - 90% of the world trade (Potter et al. 2004).
Ports have become the core strategic resource to drive the regional economy within the
context of globalization and the trade boom. Ports play a key strategic role in regional
economic development (Coppens et al. 2007). The Yangtze River Delta (YRD) was
developed with Shanghai ports as the centre; the Pearl River Delta (PRD) was
1

developed with Shenzhen and Guangzhou ports as the centre; the Hongkong and
Singapore economies were developed with their international transhipment ports. The
same is true for such ports as Rotterdam, Antwerp, London, New York and Valencia.
Ports function as an economic catalyst on revenue and employment. A World Bank
study shows that the ratio of direct revenue from port operations to the indirect revenue
from port related activities is 1:5, and the ratio of port direct employment to indirect
employment is about 1:9 (Wang 2005). Taking Tianjin Port as an example, one 40TEU
(Twenty-foot equivalent units) container brings direct revenue of 800-1,200 Renminbi
(RMB) to the port owners as a lump sum of port charges. The same container brings an
indirect revenue of 4,800 ~ 7,200 RMB to the port resulting from tugs, pilotage, ports
and port ancillary services such as container repair, stockpiling, shipping agents,
logistics, financial settlement, trailers and transportation. Every 10,000 tons of port
throughput will contribute 1.2 million RMB to Gross Domestic Product (GDP) and
create 26 jobs (Wang 2005).
The above highlights the importance of ports, which bear the dual targets of realizing
highly efficient logistics and increasing the hinterland economy for sustainable
development. This is the reason why ports have attracted economists and researchers to
study them.
1.1.2 Previous research
Port functions have developed from the traditional cargo transfer to logistics
consolidation and distribution; from traditional physical flow to finance, technology and
information flow; from the transport mode of ship/truck transfer to intermodal, and from
traditional loading/unloading to containerization and door-to-door intermodal (Bichou
and Gray 2004; Notteboom and Rodrigue 2005; Ricci and Black 2005).
Port capabilities and performance vary across the world. Singapore ports are proud of
their port efficiency. For example, Singapores vessel turnaround time is less than 10
hours; Singapore has high productivity per quay metre; and the number of annual
transactions is 8 million (Tongzon 2007). Hongkong is well known as a free trade port.
Shanghai is known as the number one port in terms of total cargo volume and number
three in terms of container traffic worldwide (AAPA 2009), benefiting from huge
logistics demand from its large hinterlands. Rotterdam is known as the door to Europe
resulting from its huge transhipment volume from/to the European continent.

The American Association of Ports Authorities (AAPA) has annual assessment for
world ports ranking in terms of cargo volumes and container TEUs. World Bank
logistics perception index (LPI) shows the ranking of national trading logistics, which
largely reflects port performance. Both LPI and AAPA show enormous difference
among the world ports. Some underlying factors must exist to determine the difference
and such factors are of crucial importance to drive port performance.
Lack of empirical studies on factors influencing port performance
There are some studies on factors influencing business performance, such as Lerner
(1997). Jacobson (1990) identify "unobservable" factors to be principal determinants of
business success, such as corporate culture, access to scarce resources, management
skill and luck. Stakeholder orientation is identified to be positively associated with
business performance (Freeman 1984; Clarkson 1995; Greenley and Foxall 1997);
structure is found to impact performance (Bain 1956; Scherer 1980; Chen 2007), and
ownership is believed to influence performance (Brouthers et al. 2007). There are
studies on factors influencing airport performance, such as Halpern (2006). However,
there are only a few empirical studies on factors influencing port performance.
Huybrechts et al. (2002) identify a series of specific factors (demand conditions, factors
conditions, supporting industries, etc.) influencing port performance and determining a
competitive advantage, which applied to Antwerp in the Hamburg-Le Havre range.
Tongzon (1995) investigates determinants of port performance and efficiency in
Southeast Asia. Chen and Zhang (2007) conducted an empirical study to find that a
combination of local monopoly and competitive cooperation influences port
performance, by employing the structure-conduct-performance (SCP) model.
Relevant researches on logistics performance indicators
Port performance indicators (PPIs) not only measure port performance but also measure
factor performance. This implies that PPIs will help to identify the influencing factors.
There are a large number of researches on national logistics indictors (Long 2003;
Bichou 2006), trading logistics indicators (Skiott-Larsen et al. 2003; Arvis et al. 2010),
and port performance indicators. PPIs focus on the technical performance of port assets
and their efficiency, such as land, cranes, berths and labour (Brooks et al. 2010). PPIs
also have been found to focus on time, cost, quality, output, services, efficiency and
logistics support by other organizations and researchers (Brooks 1985; World Bank
1991; Nombela 1999; de Langen 2003; UNESCAP 2005; UNCTAD 2006; Trujillo and
3

Nombela 1999; Bichou 2006; Robinson 2006; Talley 2006; Arvis et al. 2007; Slack
2007; Tongzon 2007; Wu 2008; DFT 2009; etc.). It is worth noting that factors
influencing port performance are dynamic and they change over time, and such factors
are closely related to PPIs.
Criteria for port competition and port choice
Booming international trade and the fast-growing shipping industry have aroused port
competitiveness, which has altered port market positions. As a consequence, ports are
no longer seen as a safe business. In order for a port to have good performance and to be
selected by customers, it should be competitive. Porter (1990) notes that competitive
advantages are created in the interplay between the rivalry, demanding customers, and
the quality of related and supporting sectors, whereas a ports related and supporting
sectors have much to do with its hinterland; hence, the port hinterlands are crucial for
port performance and port choice. The competition has drawn the attention of a number
of researchers who have proposed different competitive components of port competition,
apart from PPIs. These components are considered as determinants of port performance.
Pearson (1980) considers confidence in port schedules, frequency of calling vessels,
variety of shipping routes and accessibility of the port as port competitive components.
Collison (1984) identifies average waiting time in port and port service capacity as
competitive components. Slack (1985) adds tariffs, port congestion and inter-linked
transportation networks to the components. Brooks (1984; 1985) proposes three more
components: port costs, port reputation and/or loyalty and experience of cargo damage.
Murphy et al. (1988; 1989; 1991; 1992) consider the port facilities and equipment
available, convenient pickup and delivery times, information concerning handling,
assistance in claims handling and cargo handling flexibility, port operations policy,
international politics, change of social environment, trade market, economic factors, and
features of competitive ports as the important competitive components. UNCTAD
(1992) notes geographical location, networks in the hinterland, availability and
efficiency of transportation, stability of the port and port information system as
competitive components. McCalla (1994) considers container transport routes as a
specific important component. Arvis et al. (2007) add safety handling, customs service,
rapidness, simple documents in port, and skills of port to the port competitive
components.

The relevant port competitive components and determinants are identified as factors that
influence port performance. They are also factors considered for port choice, as what
makes ports competitive will make a port perform well and contribute to the port
selection. Since 2000, a few empirical studies on port competitiveness and port choice
have been conducted. Lirn et al. (2003) studied transhipment port selection criteria from
a container carriers perspective. Their study revealed the criteria to be handling cost of
containers, proximity to main navigation routes, proximity to import/export area, basic
infrastructure conditions and existing feeder network, which were identified as
important in descending order of importance. Tongzon and Heng (2005) studied port
competition and choice and proposed eight key determinants of port competitiveness: 1.
Port (terminal) operations efficiency level; 2. Port cargo handling charges; 3. Reliability;
4. Port selection preferences of carriers and shippers; 5. The depth of the navigation
channel; 6. Adaptability to the changing market environment; 7. Landside accessibility;
8. Product differentiation.
Tongzon (2007) conducted an empirical study in Singapore ports with manufacturers
and third party logistics providers (3PLs) and subsequently conducted another empirical
study in the Association of South-East Asian Nations (ASEAN) region, attempting to
identify the determinants of port competitiveness. He noted that the factors of cost of
production, management quality, prices, quality of the service, exchange rates,
government policies, political stability, investments in human and physical
infrastructure, centrality or proximity to markets would decide the international
competitiveness of ports.
Yeo et al. (2008; 2010) conducted an empirical study in China and South Korea with
carriers and port operators and the study results revealed that port service, hinterland
condition, availability, convenience, logistics cost, regional centre and connectivity are
the determining factors in Northeast Asia. Cullinane et al. (2005) and Comtois and
Dong (2007) analysed port competition between Shanghai and Ningbo, which share the
same hinterland. They found that market-based reforms, the increasing globalization of
Chinas economy, continuing economic development in the hinterland and Chinas
entry into the WTO all contributed to the growing demand for port services. They
identified that low price, quality of services, central government policies on regional
development, natural endowments (particularly depth of water), good inland transport
infrastructure and logistical systems, growing cargo resources and leading liners such as
Maersk and K-Line contributed to ports competitiveness.
5

Comparative studies on port choice in different regions

There are a number of studies on particular regional ports and some comparative studies
were conducted in different regions. For example, the Australian Bureau of Industry
Economics (1993) compared some selected ports within Australia. Fleming and Baird
(1999) reflect port competition in the US and western Europe. Cullinane and Wang
(2006) study efficiency of European container ports and Ng (2009) looked at port
competition in North Europe. Cullinane et al. (2005) and Comtois and Dong (2007)
compared the ports of Ningbo and Shanghai in China. Yap and Lam (2006) compared
the ports of Singapore, Port Klang and Tanjung Pelepas for competitiveness. Tongzon
(2007) investigated choice on ASEAN ports. Yeo et al. (2008) evaluated the
competitiveness of container ports between Korean and China. Lam and Yap (2008)
analysed competition between major ports in Southeast Asia. Notteboom et al. (2009)
addressed competition and coordination among adjacent seaports. Yet, few empirical
studies compare port performance between Europe and Asia, especially between the UK
and China, let alone comparison of factors that influence their port performance.
Comparing the different factors is important for port managers to learn from others who
do better in terms of performance.
Prior studies on informants
Although the empirical studies by previous researchers on port studies involve certain
port stakeholders, such as global carriers (Saeed 2009; Lirn et al. 2003, 2004), cargo
interests-manufacturers (Tongzon 2007), suppliers of services-3PLs (Tongzon 2007),
and freight forwarders (Tongzon 2009), the operators or agents of the worlds largest
service providers, multinational logistics carriers and shipping companies (Ojala et al.
2007), carriers and port operators (Yeo et al. 2008), they do not study ports by involving
all key port stakeholders in a single study. Murphy et al. (1992, 1994) and Notteboom &
Winkelmans (2001) group stakeholders into shippers, forwarders, shipping lines, port
managers. Bichou and Gray (2004) group port stakeholders into port operators,
transport providers, shippers, forwarders and carriers. However, they did not include
other port stakeholders into their empirical study, such as government agency,
academics and consultants. The competitiveness components identified by these studies
might therefore have some informant bias, as they are not addressed by a variety of key
port stakeholders in the same study. Taking wider stakeholders into account can avoid
bias in decision making.

1.2 The research gap, aim and objectives

Some of the reviewed studies in Section 1.1.2 addressed PPIs that are related to factors
influencing port performance; other studies presented the components or determinants
of port competitiveness that may be considered as factors influencing port performance
as well. Generally, port performance is strongly related to such factors as scope of the
hinterland, local product structure, local economic development level, status of the
world economy, government policy on supporting trade, landside infrastructure,
population, and culture (Tongzon 2007). Martino and Morvillo (2008) consider
activities (performed by port operators and supply chain players), resources (port
infrastructure, links to ports and services) and inter-organizational relationships
(cooperation based on trust and shared strategic objectives) as key factors in port
competitiveness within the conceptual categories of SCM.
Since factors influencing port performance are so important, port managers are eager to
identify the factors, so that they can improve the factors and then improve port
performance accordingly. However, although port authorities have always had an
interest in factors driving port performance, only a few empirical studies were
conducted. To improve port performance, such factors need exploring. As port
performance is a complex reflection of trading and economy, a comprehensive group of
factors may have influence on it concurrently apart from factors proposed by Tongzon
(2007), Huybrechts et al. (2002) and other authors.
Researchers have conducted studies on port performance (Lambertides and Louca, 2008;
Brooks and Pallis, 2008), PPIs and criteria for port competition (Fleming and Baird,
1999; Cullinane et al., 2005; Song and Panayide, 2008; Tongzon and Heng, 2005;
Martino and Morvillo, 2008; Tongzon, 2007; Yeo et al., 2008) and port selection
(Murphy et al., 1992; Lirn et al., 2003; 2004; Wiegmans et al., 2008). However, few
studies are identified to investigate factors influencing port performance.
Murphy et al. (1991) employed factor analysis to group the influencing factors into two
categories: customer service issues and freight handling capabilities, but they did not
prioritise the factors, nor did they include external factors such as environmental factors,
government support, location, etc. Wiegmans et al. (2008) classified different groups of
factors, but they did not prioritise them, measure them or compare them. The factors
were not quantified to see how important they were and how the performance were
different between the factors except Tongzon and Heng (2005). Failing to quantify
7

factors does not provide sufficient information and allow port managers to identify the
importance hierarchy order of factors, so that the factors cannot be treated in a proper
importance position. The factors with different importance should be treated differently
to avoid waste of resources and increase port efficiency.
Tongzon and Heng (2007) quantified the relationship between port ownership structure
and port efficiency; however, they only quantified one factor and missed other factors.
They identified that private sector participation in the port industry to some extent and
adaptability to the customers demand could increase port competitiveness, yet they
failed to identify other factors. Briefly, the studies did not classify, measure, prioritise
and compare the factors influencing port performance in a single study.
The literature did not identify sufficient factors influencing port performance. Even
when writers identified some factors, they failed to make sense of these factors, nor did
they use them to explain port performance. The importance of factors influencing port
performance, lack of previous research on comparative studies on factors influencing
port performance between European and Asian ports, lack of studies on more
informants engagement to avoid bias, lack of studies on quantifying and prioritising
factors driving port performance, have resulted in knowledge gaps, which have
motivated the research aim and objectives, stated below.
Research aim
According to Golden-Biddle and Locke (2006), research is conducted to fill a gap in
knowledge which previous research may have missed, being therefore incomplete,
inadequate and incommensurate with theory and practice. This research is intended to
address the identified research gaps. Firstly, the current study considers as many key
port stakeholders as possible, including consignors/consignees, port service providers
(PSPs), carriers, port managers and other key port stakeholders. Secondly, factors that
determine port performance and port choice are identified from various port
stakeholders points of view. Thirdly, the empirical research was conducted in UK and
Chinese ports to find out key factors that determine port performance, and compare the
differences and similarities between ports. This research seeks to explore the factors that
influence port performance and investigate if and why the ports perform differently. The
research results may be able to be generalized to similar European and Asian countries.

The aim of this research is to identify factors that determine port performance and
choice in a comparative study between two ports: one in European and one in Asia,
and propose a strategy for case port stakeholders to improve their port
performance. This research also seeks to identify how port managers can improve port
performance. The research attempts to discover how different the factors are in terms of
factor importance and factor performance in the respective ports, and why the factors
perform differently in different contexts. The research also considers port choice, which
is closely related to port performance.
Research objectives
In order to achieve the above aim, the objectives of this research are to:
1. Identify the key factors that drive port performance and choice
2. Investigate the differences in importance and performance among the factors
3. Analyse how the factor importance and performance vary for different ports
4. Analyse the role port hinterland plays in port performance and choice
5. Illustrate the usefulness of the key findings from the analysis for port
stakeholders.
The research objectives are achieved using a variety of research methods and data
sources, presented in a later section.
1.3 Significance of the study
Seaports are key constituents in the supply chain and their pre-eminent role in
international distribution is unlikely to be challenged (Notteboom and Winkelmans
2001). As ports perform differently, it is important to identity factors influencing port
performance. Only by identifying the different factors can a region find a way to
improve the factors, and only by improving the key factors can port performance be
improved accordingly. The research results contribute to both theory and practice.
Theoretically, it offers a different dimension to theorising factors influencing port
performance, having implications for academics. Firstly, both internal and external
factors influence port performance, and some of the external factors may influence
internal factors. Secondly, this is a research study involving all the key port stakeholders
in a single study to avoid interviewee bias. Thirdly, this research contributes to the
literature with a comprehensive review of up-to-date port performance indicators and
factors influencing port performance. Fourthly, it is a cross-culture empirical study to
compare the performance and factors influencing two European and Asian ports, which
9

has not been done before due to language and data constraints. Finally, it is an empirical
research to apply importance-performance analysis (IPA) in the port sector to improve
service quality.
Practically, the research findings can be used in the consideration of port management
and future port development. The outcomes are expected to aid port managers and other
stakeholders that have direct or indirect power over port performance to focus attention
on improving port performance in order to compete more effectively.
1.4 Methodology
This research is exploratory regarding the factors that determine port performance. It is
also concerned with investigating these factors across port regions. Mixed methods are
utilised in this research to achieve the listed research objectives by both qualitative and
quantitative data. Mixed methods are regarded in this research as appropriate and
consistent with the nature of interpretivist and positivist enquiry (Hussey and Hussey
1997). Mixed methods were selected as they are understood increasingly to provide
multidimensional insights into many management research problems (Mangan et al.
2004), to complement each other and improve confidence in findings (Bazeley 2008),
and to enhance the validity of the research results (Filippini 1997).
The research was carried out by means of a literature review and surveys in the ports of
Humber (the UK) and Xiamen (China). A purposive sampling approach was followed
for the selection of research context. China was selected because Chinas entry to the
WTO has a significant impact on the activities in trading, freight transportation and
distribution, warehousing and freight forwarding, and 90% of Chinas international
trade freight is handled at the ports (UNCTAD 2002). China is a typical eastern
developing country. The UK was selected because 95% of the UKs international trade
freight is handled at the ports (Potter 2004). The industrial revolution and developments
in transport, particularly maritime shipping development once made the UK ports
famous such as Liverpool, Southampton and London very prosperous. The UK is an
island country whose sea-shipment is the main transport mode. The choice of ports in
both countries also allows a comparison of two ports in Europe and Asia.
Specifically, the Humber was selected as it is the largest port complex in UK and bears
25% of the UKs international trade by value. It once enjoyed greater glory through
trade. However, it has lost its position since the 1970s with the decline of the fishing
industry. Xiamen was selected as it is one of first cities/ports to enjoy the preferential
10

policy of special economic zones. Studying these two port regions may result in
identification of factors that influence port performance.
In line with the adopted survey strategy, literature review, interviews and questionnaires
were conducted in different research phases. Firstly, literature was reviewed to form the
research foundation and help to develop a good understanding and insight into the
relevant previous research and emerging trends. The review focused on construction and
conceptualisation of factors that influence port performance and port choice. It provided
the background to this research and generated an initial list of potentially important
factors. Secondly, to answer the research questions, forty interviews with key port
stakeholders in the Humber (UK) and Xiamen (China) were conducted to explore the
factors that influence their port performance and reduce the number of factors identified
from the literature. Thirdly, a questionnaire was designed based on both the literature
and interview results, and questionnaire surveys were conducted. Two hundred and
fifty-four valid questionnaire responses (one hundred and fifty-two from Xiamen and
ninety-two from the Humber) were used to assess the reliability and validity of the
factors derived from the literature and to identify any new factors. The questionnaire
results also validated the interview results. In addition, secondary documents and
information from a variety of sources were collected and examined in order to
understand the selected ports.
The following explains the research process and how each research objective was
achieved. This is also shown in Figure 1.1.

Chapters 2, 3, 4, 5,6
Literature review

Chapter 1
Background
& significance
of
this
research:
Research gap
Research aim

Methodology
(mixed methods of
interviews
and
questionnaire surveys)
(Thematic analysis
Factor analysis
Mean comparison
Gap analysis
T-test
Traditional IPA
Revised IPAs)

Chapters 5,6, 7
RO1:
key factors
influencing
port
performance
Chapters 6, 7
RO2: factor difference
in importance and
performance
Chapters 6, 7
RO3: factor variance
for different ports in
importance
and
performance
Chapters 5, 7
RO4: role of
hinterlands

port

Chapters 7
RO5: usefulness of key
findings

Figure 1. 1 Research route map (RO: research objective)

11

Chapters 5, 6, 7
Key findings on
Key factors;
Imp./perf. dif. among factors;
Factor imp./perf.dif. by ports;
Role of hinterland

Chapter 8
Contributions to
- knowledge
- methods
- practitioners

Firstly, the research background, significance of this research and knowledge gap were
investigated, which justifies why this research was undertaken and how research
objectives were formulated.
Secondly, it was decided how the research objectives would be achieved. Regarding
Research Objective 1, exploratory interviews were conducted and a questionnaire
survey was developed. The factors drawn from the literature and the exploratory
interviews were used to ascertain the respondents understanding of the factor
importance. A questionnaire was designed to discover the importance assigned to
factors by respondents. Respondents were asked to evaluate factor importance of their
focal ports, factor performance of their focal ports and factor performance of other ports.
To understand the importance comprehensively, explicit factor importance of the
selected factors was ranked by mean in descending order. A traditional importanceperformance matrix was employed to extract factors needing urgent actions which had
explicit means with low performance and with high importance. Importanceperformance gap analysis was used to identify factors requiring quality service
improvement. Performance gap analysis (between focal ports and other ports) identified
factors needing actions to improve service quality. This performance gap analysis
together with factor importance was employed to identify salient factors. Revised IPA
was employed to identify basic factors employing 3-factor theory. The factor
importance and determinants obtained by various analyses achieve the first research
objective.
With regard to Research Objective 2, differences in importance and performance among
the factors were investigated by mean difference between factor importance and mean
difference between factor performances. Concerning Research Objective 3, interviews
and questionnaires were used to cross-analyse how the factor importance and
performance varied for different ports. Independent-Samples t-tests were conducted to
identify the distinctions in importance and performance between different ports.
As for Research Objective 4, semi-structured in-depth interviews were conducted and
the answers to open questions in the questionnaire were examined to investigate the role
a port hinterland plays in port performance and choice. Regarding Research Objective 5,
implications for port stakeholders were put forward based on the interview and
questionnaire findings and in-depth discussion of the findings with the support of the
literature.

12

After the objectives were achieved, research contributions were derived from the
findings in terms of knowledge, practice and research methods.
1.5 Outline of the thesis
This thesis consists of eight chapters. Chapter 1 introduces the research as a whole.
Background information on the research topic, a summary of previous research, the
research gap, aim and objectives, and a brief explanation of the methodology are given.
This is followed by a literature review in Chapters 2 and 3. Chapter 2 discusses the
general background of ports. It covers the concept of port, relevant theories to support
this research and port activities. This chapter then addresses port functions, roles and
changes. It reviews the literature on trends in maritime transport, and tackles the issues
of port ownership and port challenges. Theories underpinning port performance are
briefly reviewed. Chapter 3 reviews the literature on port performance and key
performance indicators (KPIs), which are then categorised. This is followed by reviews
on criteria of port competition and choice. This chapter also presents examples of
current and historically successful ports; some common lessons on factors that make
them outstanding are learned. Factors selected for the fieldwork are then extracted from
the successful ports and the presented literature.
Chapter 4 describes how the research was designed and conducted. After a brief review
of the research aim and objectives, the research philosophy of social enquiry and
management and the researchers personal philosophical stance on the current research
are set out. This is followed by a discussion of the research methods. The survey
strategy adopted is explained, and a justification is given for using interviews and a
questionnaire survey as the main methods for data collection. Then selection of
locations and interviewees for the empirical research is presented and justified.
Importance-performance analysis is detailed addressed. This chapter ends by presenting
the tools employed for data analysis and data interpretation, and addressing ethical
considerations.
Chapters 5 and 6 present the data analysis and research findings. Chapter 5 contains the
analysis and findings of the interviews. Common patterns and a number of themes
emerge. They shed light on the main factors that influence port performance. Chapter 6
presents the questionnaire analysis, starting with data cleaning, followed by the data
validity and reliability. Then factor analysis is conducted to extract aggregate-factors
from the questionnaire factors. Principal component analysis is conducted to reduce the
13

data. The main data analysis concerns about analysis of descriptive comparison between
the two case ports. Detailed comparisons of factor importance and factor performance
are presented, and the distinctions between factor importance and factor performance
are reported. The importance-performance analysis is applied through the importanceperformance matrix, and the factors for improvement are identified by various
techniques.
Chapter 7 discusses the findings based on the supporting literature and combined results
from data analysis in Chapters 5 and 6. The research objectives are discussed one by
one. An evaluation of respondents aggregated perceptions of the importance reveals
that all the factors are perceived as important (their mean scores are over 3.0 on a 5point Likert scale), although different regions have their own priorities for improvement.
Mean comparison, gap analysis, traditional IPA and revised IPA provide different
results from different angles employing the same data. These are integrated with
interviews to identify the common basic factors, salient factors and factors for urgent
actions for the ports of Humber and Xiamen to concentrate on. Based on the research
findings and related discussions, implications for port managers are presented for the
Humber and Xiamen in turn.
Chapter 8 concludes this research. It first discusses the key findings. Then, the
achievement of the research objectives is demonstrated. This is followed by a discussion
of the originality and contributions of the research. The chapter finishes with limitations
of this research and suggestions for future research.

14

2. LOGISTICS, SUPPLY CHAIN MANAGEMENT AND PORTS

The main objective of this chapter is to review the extant literature. This chapter begins
with a definition of logistics and supply chain management (SCM) and their interrelationship. Then it introduces the definition of port, addresses port activities, port roles,
logistics chains and port-centric logistics. These are followed by relevant theories
underpinning port performance, port development trends and challenges. Lastly the
chapter ends with a summary.
2.1 Defining logistics and supply chain management
Logistics and SCM are vague and broadly tackled concepts as they are not clearly
defined and distinguished. They are in nature linked to most disciplines such as
transport economics, operations management, marketing, quality management, supply
and

purchasing

management,

engineering,

geography

and

information

and

communications technology (ICT). Although the two terms are often used
interchangeably, it is necessary to distinguish them. This section will review the
different definitions and make clear the definition adopted for this research.
2.1.1 Definition of Logistics
The word logistics originates from the ancient Greek logos () whose meaning was
related to mathematical calculations. During the early twentieth century, logistics was
used in a military context when the Americans used it to describe the organisation of
moving, lodging and supplying troops and equipment (Mangan et al. 2008). Later on,
the application of logistics moved into the business area and focused on the movement
of goods and the flow of information from one point to another in the supply chain, to
meet the demand requirements of the end customer. Today, logistics is applied not only
to manufacturing business, but also to service sectors such as banks, hospitals, schools,
posts and ports. Logistics has definitely become the backbone to support business and
national and global economic growth.
A number of definitions of logistics have been given in the past few decades. APICS
and the Concise Oxford Dictionary define logistics as the art and science of obtaining,
producing, and distributing material and product. The Chartered Institute of Logistics
and Transport (CILT) defines logistics as the time-related positioning of resources to
meet user requirement, which involves getting the right product to the right place in
the right quantity at the right time, in the best condition and at an acceptable cost
15

(Mangan et al. 2008). The authors add another two Rs to CILTs definition (to the
right customer and in the right way) and note that getting all the Rs correct can be
a serious challenge for business.
Logistics has been recognised as one of the last real frontiers of opportunity for firms to
improve their corporate efficiency (Drucker 1962). Different definitions of business
logistics have been given by Luttwak (1971), Cavinato (1982), Novack et al. (1992),
Bowersox and Closs (1996), Christopher (1998), Cox et al. (1998) and Coyle and Bardi
(2003). Logistics is augmented to include customer services along with goods and
information movement (Cooper et al. 1997). Transportation, warehousing, order
processing, customer service, administration and inventory holding are considered as
components of business logistics activities (Lambert et al. 1998a).
Bechtel and Jayaram (1997) distinguish manufacturing logistics and service logistics.
They note that logistics in retailing is a pull system (highly customer driven) while that
in manufacturing is a push system somewhat driven by the customer but significantly by
the suppliers. Logistics process output is viewed as creating value for the ultimate
customer (Langley and Holcomb 1992) and contributing to the profitability of the firm
at present or in the future (Cooper 1994). Lummus et al. (2001) state that the variety of
definitions indicates that logistics entails the process of planning, implementing and
controlling the flow and storage of goods and services from the point of origin to the
customer, conforming to customer requirements, including inbound, outbound, internal
and external movements, and return of materials and products.
Most of the definitions entail the movement of materials and products from origin to
end customers (including pre-production, in-production and post-production), but some
miss the flow of information, while some miss the purpose of serving customers. There
has been no consensus but confusion over logistics, although there are some common
connotations among the different definitions. The researcher will adopt the most widely
accepted definition by the US-based Council of Supply Chain Management
Professionals (CSCMP), which defines logistics as part of SCM, i.e.
that part of the supply chain process that plans, implements, and controls the efficient, effective
forward and reverse flow and storage of goods, services and related information from the point of
origin to the point of consumption in order to meet customers requirement( Vitasek, K. 2010).

This definition represents a supply chain orientation in the sense of from point of
origin to point of consumption (Lambert et al. 1998b). It integrates material

16

management and physical distribution, including flows of materials, information and

services in both manufacturing and service sectors.
Grant et al. (2006) note that logistics plays a key role in two significant ways in the
economy. First, logistics is one of the major business costs, which affects and is affected
by other economic activities. Second, logistics, an important activity to facilitate sales
of goods and services, supports the movement and flow of economic transactions.
Logistics has experienced six eras of evolution since the 1900s, namely, farm to market,
segmented functions, integrated functions, customer focus, logistics as a differentiator,
and behavioural and boundary spanning (Kent and Flint 1997). As the logistics
boundary itself is changing, the definition of logistics is updated through the efforts of
academics, practitioners and professional associations to match the current
perspective. Logistics is often associated with SCM, which is defined in the next section.
2.1.2 Definition of supply chain management
The supply chain (SC) concept originates in the logistics literature and logistics has
continued to have a significant impact on the SCM concept (Jones and Riley 1985;
Monczka et al. 2001). Consultants introduced SCM in 1982 (Oliver and Webber 1982;
Grant et al. 2006). SCMs initial emphasis was to facilitate product movement,
coordinate supply and demand by retailers, who began to compete by the management
of materials, and then the concept spread to other industries (Bechtel and Jayaram 1997).
The term SCM has risen to prominence (Cooper et al. 1997) because of global sourcing,
an emphasis on time and quality-based competition and the respective contribution to
greater environmental uncertainty (Mentzer et al. 2001).
From the five schools of thought (functional awareness school, linkage school,
information school, integration and process school and future school of thought)
(Bechtel and Jayaram 1997), some researchers define that SCM encompasses different
functions such as flow of materials, purchasing and sales (Tyndall et al. 1998; Mentzer
et al. 2001), some emphasize the links between different functions (Lummus et al. 2001;
Harrison and Hoek 2005), some focus on information technology (Handfield and
Nichols, 1999; Harding 2004), some highlight the integration of processes and functions
(Ayers 2003; Monczka et al. 2001; Bolstorff and Rosenbaum 2003) while others
highlight relationships (Lummus et al. 2001; Mentzer et al. 2001). The different schools
of definition result in confusion for both researchers and practitioners.

17

CSCMP re-conceptualized SCM from integrating logistics to integrating and managing

key business processes across the supply chain, which means SCM is a more strategic
approach than logistics (Grant et al. 2006). CSCMP defines SCM as
Supply Chain Management encompasses the planning and management of all activities involved in
sourcing and procurement, conversion, and all logistics management activities. Importantly, it also
includes coordination and collaboration with channel partners, which can be suppliers,
intermediaries, third-party service providers, and customers. In essence, Supply Chain Management
integrates supply and demand management within and across companies. (Vitasek 2010)

This definition reflects that SCM is a combination of strategy and activity,

encompassing collaboration (Gibson et al. 2005), and this is what this research adopts.
2.1.3 Relationship between logistics and SCM
The terms "logistics" and "SCM" are often confused and viewed as overlapping (Larson
and Halldorsson 2004) because the concepts are not well defined and the professional
world uses both terms to talk about the same issues (Long 2003). The unclear boundary
of SCM has made it difficult to design educational and research programmes in SCM
and it is difficult to implement SCM (Larson and Halldorsson 2004).
Before 1998, most practitioners, consultants and academics did not differentiate SCM
from logistics (Grant et al. 2006). Larson and Halldorsson (2004) investigate the two
concepts and find four relationships between them, as Figure 2.1 shows.
Traditionalist
Logistics

Re-labelling
Logistics/SCM

SCM

Unionist
SCM

Inter-sectionist
SCM

Logistics

Logistics

Figure 2. 1 Relationships between logistics and SCM concept

Source: Larson and Halldorson (2004) Logistics vs. SCM

The traditionalist positions SCM as a function or subset of logistics because the

logistics community tends to view SCM as logistics outside the firm to include
customers and suppliers (Stock and Lambert 2001a). This reduces SCM to a single
function and a special type of logistics. Traditional practitioners would create a new
SCM analyst position within the logistics group. Analysts focus on logistics problems
within or between organisations and the SCM leader would report to the logistics head
(Larson and Halldorsson 2004; Larson et al. 2007). In the view of traditionalists,
18

educators can simply add an SCM lecture to the logistics management course or insert a
SCM chapter into a logistics text-book (Larson and Halldorsson 2004).
According to Larson and Halldorsson (2004), re-labelling just entails a name change;
what was logistics is now SCM. There are no clear specific characteristics to
differentiate these two concepts (Simchi-Levi et al. 2002). Therefore, in peoples
understanding, SCM and integrated logistics management are not appreciably different
(Copacino 1997). Some would even regard SCM as a synonym for logistics (Cooper et
al. 1997). An international survey with SC managers was conducted in 2001 and a
number of responses reflect the re-labelling perspective (Gammelgaard and Larson
2001). To relabellers, educators will teach the same old logistics course under a new
name of SCM while practitioners will be re-titled from logistics analyst to SCM
analyst with little or no change in job description.
Unionists see logistics as a part of SCM and consider that SCM completely subsumes
logistics (Giunipero and Brand 1996). With the increasing interest in SCM, many
authors have discussed the differences between SCM and logistics. Both Stevens (1990)
and Hewitt (1994) agree that the final stage of SCM implementation is a process rather
than a function. Cooper et al. (1997) present that SCM is not just another name for
logistics but includes elements that are not typically included in logistics, such as
information systems integration and coordination of functional activities.
Educators might remove logistics management from the curriculum and cover the
essentials of logistics in a new SCM course; or they may keep the old logistics
management course and create a SCM course to develop further the cross-functional,
inter-organisational nature of strategic logistics and related functional areas (Larson and
Halldorsson 2004). Practitioners would change the organisational structure/chart and
create a new high-level position.
Mentzer et al. (2001), Cooper et al. (1997) and Lambert et al. (1998b) take the unionist
view that SCM comprises logistics. This view has been reinforced through a number of
industry practitioners. Executives have visualized the necessity to go beyond the
logistics function and focus on making business processes more effective and efficient
and integrate all key business operations across the SC (Cooper et al. 1997; Lambert et
al. 1998b). Grant et al. (2006) suggest that SCM is more comprehensive than logistics
because the management of multiple SCM processes includes the logistics process.

19

Inter-sectionists see SCM and logistics as partially overlapping. Practitioners can add a
SCM staff function and educators would champion an interdisciplinary SCM major.
Perhaps team-taught, cross-functional SCM courses could split into modules that are
aligned with traditional functions or positioned at functional interfaces (Larson et al.
2007).
Some people may change their views on the relationship between SCM and logistics as
time passes. For example, Stock and Lambert were traditionalists in 2001 (Stock and
Lambert 2001b) but they became unionists in 2004 (Lambert 2004a; Lambert 2004b).
According to a survey in 2001, most respondents (SC managers) held the view of relabelling and then became unionists (Gammelgaard and Larson 2001). Results of
another international survey by Larson and Halldorsson (2004) show that 51% of the
respondents were relabellers and 22% were unionists. Only two years later, when a third
survey was conducted by Larson et al. (2007), the result was quite different. This time,
47% of respondents were unionist, and re-labellers had a sharp drop from 51% to only
6%. What is worth noting is that all respondents had CSCMP membership.
It seems that academics tend to be re-labellers while practitioners tend to be unionists.
People may become more SC oriented as the unionist view has gained popularity. This
research takes the unionist view as it is more widely accepted and it is the trend that
relabellists become unionists. The next section will discuss ports in the context of
logistics systems and global logistics chains.
2.2 Ports and global logistics chains
Increasing globalization and a growing degree of product customization have resulted in
more complex supply chains that demand a more rapid response to order delivery and
more effective movement of goods across the world, which makes logistics a new
service sector crossing departments, industries and regions. How to make goods move
more efficiently to satisfy international and national trading has thus become a key
factor to drive the regional economy and its development, which cannot be separated
from port efficiency.
2.2.1 Ports in global logistics chains
The port is a land area with maritime and hinterland access that has developed into a
logistics and industrial centre, playing an important role in global industrial and
logistics networks (Notteboom and Winkelmans 2001) (when logistics chains come
20

together, they form logistics networks). De Langan (2003) defines a port as a collection
of a diverse set of economic activities. Ports are the locations where road, rail and
waterway start and end for cargo consolidation and distribution, so Long (2003) defines
a port as the intersection of different modes of transport. Seaports are hubs in worldwide
transport to ensure interactions of domestic and international markets. They witness
flows of goods and services between industries, consumers, and different countries.
Many seaports and major inland river ports are critical ports as cargo transport centres,
intermodal between road, rail, air and waterway.
Being pivotal places for sea/land transport interface, places where ships and cargoes are
handled and services are given to them, nodes of shipping networks and elements in
value-driven chain systems, ports have become elements and links in a global logistics
and value chain (Robinson 2002). Ports not only deliver value to shippers and thirdparty logistics (3PL) service providers, but also capture value for ports themselves.
Beresford et al. (2004) note the increased use of information and communications
technology in the integrating SCM trend at ports; this indicates that ports are elements
of the global supply chain.
Souza et al. (2003) divide container ports into three types: hub ports, feeder ports and
direct-call ports. Trujillo and Nombela (1999) categorise seaports into landlord, tool and
service ports, which differ essentially in terms of the relative role of the port managers
and the private sector operators. In the case of a landlord port, port authorities own and
manage the port infrastructure while private firms provide port services and own their
assets: superstructure (like building) and equipment (like cranes); an example is
Barcelona. Most port authorities are owners of the land inside the port areas (Bichou
and Gray 2005). In this case, land rent and port dues are their income. The authorities
have two main goals: to facilitate sustainable economic development of the port as a
whole, and to become an efficient and effective organisation that generates income to
cover costs, to make investments and to yield a return on shareholders investment
(Lugt and De Langen 2007). In the case of a tool port, port authorities own the
infrastructure, superstructure and equipment, while private firms provide services by
renting port assets, through concessions or licenses. In the case of a service port, such as
Singapore port authorities (SPA), port authorities are responsible for the port as a whole.
They own the infrastructures and hire employees to provide services directly.
The globalisation of production has been one of the main drivers for the change in the
port industry. The multi-national companies (MNCs) focus on innovation and customers
21

instead of ownership and management of many production sites. They reduce cost by
outsourcing production to the low cost developing countries, where goods are produced
and distributed all over the world via ports. Global sourcing thus acts as a major driver
of world trade and has deeply affected transportation and distribution systems
(Notteboom 2006). Ports are a dynamic player in the competitive SCM scenario
(Martino and Morvillo 2008).
2.2.2 Port activities
The freight that ports handle is often categorised into liquid bulk (like oil, petroleum,
chemicals), dry bulk (like animal foodstuffs, coal, fertilizer, cement fines, minerals,
grain, fertilizer slag), break bulk (general loose non-containerised cargo, stowed directly
in a ship), and unitised freight [comprising both Roll-on Roll-off (Ro-Ro) and lift on,
Lift off (Lo-Lo)] cargoes. Ro-Ro are items that can be driven on/off a vessel, including
Heavy Goods Vehicles, cars, buses and other vehicular traffic, while LoLo are unitised
or containerized cargo to be loaded or unloaded by crane (Tongzon 1995). The activities
related to freight handling are port activities.
According to Bichou and Gray (2005), there are two major components in a port system:
ships and cargoes. This has led to two types of logistics services: services to ships and
services to cargo. The services happen in two separate areas: at the sea or waterway side,
and at the ship/shore interface. The services to ships include such services as dredging,
pilotage, mooring/unmooring, berthing, repair and maintenance, supply and bunkering.
Based on the Department for Transport (DFT) and North American Industry
Classification System (NAICS), the services to cargo include transport, warehousing,
freight agency, stowing, break bulk and consolidation, manufacturing, cargo handling
(carriage, packaging, processing), trading, insurance, finance, customs agencies,
distribution and information treatment for planning, implementing and controlling the
cargoes flowing to and from the hinterlands and forelands in a port area. The services
are largely port activities.
The port activities may be within a particular region or across different regions from
supplier to consumers between different ports or between ports and hinterlands. De
Langen (2003) includes a typology of port-related industries for the different port
activities. The port industry incorporates all economic activities that are required for the
movement of ships and their cargoes and passengers through the port. According to the

22

Bureau of Transport Economics Report 101 (Economics 2000), the typical activities of
the port industry are categorised as shown in Table 2.1.
Table 2. 1Port-related activities
Category
Port authority operations

Ship operations

Ship
loading
and
unloading/discharging
Cargo services
The land transport and
storage
Government agencies

Activities
Preparing, co-ordination and promotion, land and property management,
safety and emergency response, shipping channels and navigations aids, port
authority wharves, berths, jetties, infrastructure for roads and utilities
Shipping lines/agents, pilotage, towage, line boats, mooring/unmooring,
bunkering, ship supplies, ship repairs and maintenance, container repairs,
container maintenance and servicing, container stevedores
Private wharves, berths, jetties, container and bulk stevedoring, livestock
stevedoring, bulk cargo loading/unloading, passenger terminals
Customs brokers, freight forwarders, container packing/unpacking, cargo
surveyors, wool dumping and fumigation
Road transport, rail transport, transfer between road/rail and storage facilities
and storage
Customs, quarantine, ship safety, port safety, environmental management and
port policy administration.

Role
Cluster manager (De
Langen 2003)
Shipping lines are
essentially the port
customers
Ship services at water
side
Cargo services at
sea/shore interface
Cargo storage and
movement
Port services on
safety

Source: adapted from Economics (2000)

Most ports are run by government entities, often known as port authorities, usually by a
commission assigned by a local or regional government (Long 2003). The port
authorities are the land managers with responsibility for a safe, sustainable and
competitive development of the port and they face three trends: ongoing port reform
(privatisation, corporatisation and commercialization), extension of port competition
towards the hinterlands, and increasing importance of the licence to operate (Lugt and
De Langen 2007).
In port activities, the following ten factors are often considered, namely, tariffs and nontariff barriers, trade, efficiency of customs administration, efficiency of import-export
procedures, transparency of border administration, availability and quality of transport
infrastructure, availability and quality of transport services, availability and use of ICTs,
regulatory environment and physical security (Hanouz and Lawrence 2009). Because of
the dissimilar physical features of ports, the variety of cargo and ship types, and the
wide range of port services, port activities need to be implemented efficiently and
effectively. Ports have thus been developed, as described in the next section.
2.2.3 Port development and port generations
Four phases of port development
Ports have experienced four phases of development, namely, setting, expansion,
specialisation and regionalization (Bird 1980), which are represented by Figure 2.2. The
first phase was setting, when ports functioned as traditional transhipment hubs. With
the evolution of maritime technologies and skills improvement in material handling,
ports entered the second phase of expansion. More general cargoes were shipped and
handled at the port with a wider urban area. Later on, some ports became more
23

specialized in one or more shipping products by making use of their advantages in

location and resources, entering the third phase of specialisation. Containerised cargo
and bulk cargo emerged then. Some ports prefer handling containers, while others show
more interest in bulk materials. Ports also have function preferences at this stage, for
example, Rotterdam is a transhipment port, while Antwerp is an export port.
Setting

Expansion

Phase 1

Phase 2

Specialization

Regionalization

Phase 3

Phase 4

Figure 2. 2 Four phases of port development

Notteboom and Rodrigue (2005) claim that ports have entered the fourth phase of
regionalisation. Freight distribution centres and freight corridors have emerged to
allow ports to serve very large inland hinterlands. A ports hinterlands connections in
this sense determine the success of that port. Some seaport terminals that act primarily
as transhipment hubs have an extensive maritime hub-and-spoke and collection &
distribution networks. Garcia-Alonso and Sanchez-Soriano (2009) conclude that the
maritime areas and the hinterlands complement each other, as ports are included in
important maritime lines and with an important volume of national traffic.
Port generations
The port generations proposed by UNCTAD are widely cited. UNCTAD (1999b)
distinguishes ports into four generations, with port roles and functions, institutional
structuring, operational and management practices varying significantly from generation
to generation, which is presented in Figure 2.3. First and second generation ports are
operated in a traditional manner. Third generation ports handle containers and provide
value-added services, employing technology and know-how. Fourth generation ports are
mainly the product of recent vertical and horizontal integration strategies.
2nd generation
Industrial interfaces
Bulk/break bulk
Rely on capital
Traditional manner

1st generation
Ship/shore
Bulk/break bulk
Rely on labour
Traditional manner
Bulk/break bulk
Rely on labour
Traditional manner

3rd generation (1994)

Containers (unitisation of trade and
packaging)
Value-added services
(Warehousing, packaging & distribution)
Logistics and intermodal centres
Technology and know-how

4th generation
Separate
physically
and
geographically
Common
operators
and
administrators
Vertical and horizontal integration

Figure 2. 3 Port generations

24

It is worth acknowledging that although some ports have already entered the fourth
generation, many ports are still in the first or second generation.
2.2.4 Port functions, roles and role change
Port functions
The basic functions of ports are transport, transhipment, loading and unloading, storage
and distribution, which are closely related to port activities. With the advantage of
location, many important ports have adopted the concept of front port, back factory to
provide processing, assembling and cargo sorting and other value-added services, which
can not only reduce the transport cost and the packaging damage during the handling
and transport, but also ensure the quality of products. Ports function as distribution or
dedicated areas for both global logistics services and value-added logistics (VAL)
(Harding and Juhel 1997). They can evolve from a transhipment centre to a complex of
functions within a logistics system (Notteboom and Winkelmans 2001).
With increasing trade, a port has to be competitive and port functions need to expand.
Besides the above basic functions at the traditional sea/land interface and value-added
services, ports have developed some other services including trade, financial, leisure
and property development activities, marketing and decision-making information for the
port customers (shippers and carriers), agency, insurance, freight forwarding, carrier
forwarding, customs and other trade services. Ports integrate the various logistics
functions to become a logistics network with more connotations than just a transport
link, as shown in Figure 2.4. The port system serves not only as an integral component
of the transport system, but also as a major sub-system of the broader production and
logistics systems (Bichou and Gray, 2004). As one irreplaceable point in the logistics
chain, ports have opportunities to develop as logistics centres by expanding their
traditional services and value-added services.
Basic
functions
Transport
Loading/offloading
Warehousing
Distribution

Integrate

value added
Packaging
Processing
Assembly
Cargo splitting

Other extended services

Trading, financial,
leisure, property development,
marketing, decision-making
information, agency,
insurance, customs,
etc.

Figure 2. 4 Port functions

25

services

Port roles
Port roles are diverse in scope and nature. With the activities performed, ports play
different roles as economic catalyst, job generator, communication and other influences.
Moreover, their roles are changing.
Economic catalyst: Ports play a vital role in the regional economy to provide the link
between suppliers and customers. From an economic perspective, ports are increasingly
related to the competitiveness of economies (Cullinane et al. 2002; Sanchez et al. 2003;
Bryan et al. 2006). Developing ports is beneficial to the capital structure of the regional
economy. As Benito et al. (2003) note, ports, being dynamic industrial and local clusters,
are important for the creation of economic value.
Bichou (2006) found that port impact studies focus on two areas: port economic impacts
and port trade efficiency. Because of the port-city interface, ports are seen as economic
catalysts for the regions they serve. The port services and activities generate aggregated
benefits and socio-economic wealth for the geographical region through urban planning
and environmental economics. Ports are thus seen as a driving force and engine in local
and national economic development and policy makers consider ports as economic
catalysts (Gooley 1999; Bichou and Gray 2005). Policy makers are interested in
including ports in regional policy such as urban planning and expansion, safety, security
and environmental sustainability (Bichou and Gray 2005). As ports are critical trade
facilitators, they can generate additional economic benefits in such activities as land
ownership (berths, terminals) and cargo handling (Mangan and Cunningham 2000).
The objectives of UK ports are to serve the national interest and support the
competitiveness of national and regional economies, according to the government
policy for the UK ports (DFT). Ports thus should remain capable of handling trade and
its potential development efficiently and sustainably to promote international trade and
economic development, employment, and industry in the port city and hinterlands, and
to optimize the maritime logistics sector structure. Bryan et al. (2006) quantify the
economic significance of the port activities in South Wales, showing multiplier effects
of the Association of British Ports (ABP) port activities in terms of ports contribution
to the local economy and employment.
Job generator: Ports function as job generators by increasing the opportunity for jobs.
Mechanization has created many new opportunities for employment by new machines.
Ports provide direct and indirect jobs to the local community and society, and generate
26

income for employees who will consume in the community accordingly. For example,
the Rotterdam port complex was directly responsible for 86,500 jobs in 2006, which
means

10%

of

the

population

in

Rotterdam

work

for

the

port

(www.portofrotterdam.com). As ports provide employment, income for local

communities and flow-on effects through purchases from other industries, they have
economic multiplier effects as a growth pole.
Communication and integrated logistics system: Besides the direct impact on the
economy by creating jobs and generating income, ports have indirect impact on
economic competitiveness as they attract inward investment, improve access to tourists,
support international or inter-regional trading activities and enable companies to get
access to markets (Bryan et al. 2006). Moreover, ports play a proactive role in
promoting communications of culture, science and technology.
As reviewed in 2.3.4, the roles of ports have been changing. Robinson (2002) notes that
ports could be more proactive as key elements in value-driven chain systems by creation
of competitive advantage and value-added delivery. Perceived from an integrated
logistics, trade and supply channel approach, ports can claim further roles and
dimensions as logistics centres, and trade channels (Grant et al. 2006). Ports can bring
together various SC members to the integrated channel management system, where
the port stands as a key location linking different flows and channels with their
members (Bichou and Gray 2004).
2.2.5 Port hinterlands
Literally, port hinterlands refer to the land behind a port. A hinterland is the area from
which port customers are drawn (UNCTAD 2006) but it is difficult to define in spatial
terms (Pettit and Beresford 2008). Slack (2007) indicates that changing port-hinterlands
relations has a clear impact on port development patterns. The performance of seaports
is strongly entwined with the development and performance of associated inland
networks that give access to cargo bases in the hinterlands.
Garcia-Alonso and Sanchez-Soriano (2009) analyse the actual inter-port distribution of
traffic to study port choice in Spain, and conclude that apart from port location, the
hinterlands of a port contribute to the port selection process. Port prosperity is closely
related to the economic wealth of its hinterlands and forelands (Pettit and Beresford
2008). For example, due to lack of inland hinterlands, the glory of Portuguese trade did
not last long and Portugals port development was constrained, although its economy
27

was flourishing at the time. The transit trade could only play a very small role in
improving the local economy. On the contrary, as the Netherlands and UK had rich
inland hinterlands, as these countries became prosperous, trade and navigation
developed. The economy of port cities and their surrounding areas also increased, as in
the cases of Amsterdam and London.
Modern ports compete for far-reaching cargoes with far-distant counterparts in terms of
hub, transhipment and intermodalism. The shift of port activities from sea/shore
interface to the land-side development and the use of intermodal transportation have
prompted the redefinition of port hinterlands. The logistical hinterlands are facing the
reality of containerization, trade imbalances, repositioning costs, manufacturing and
leasing costs, and usage preferences (Dowd and Leschine 1990; Bassan 2007).
Notteboom and Rodrigue (2005) claim that ports have entered the phase of
regionalisation. Freight distribution centres and freight corridors have emerged to
allow ports to serve very large inland hinterlands. A ports hinterlands connections in
this sense determine the success of that port. Some seaport terminals that act primarily
as transhipment hubs have an extensive maritime hub-and-spoke and collection &
distribution networks. Garcia-Alonso and Sanchez-Soriano (2009) conclude that the
maritime areas and the hinterlands complement each other, as ports are included in
important maritime lines and with an important volume of national traffic.
Increasing containerization and port regionalization are mutually influential. Port
regionalisation is characterised by a strong functional interdependency and even joint
development of a specific load centre and selected multimodal logistics platforms. It
brings the perspective of port development to a higher geographical scale beyond the
port perimeter (Notteboom and Rodrigue 2005). Ports and hinterlands are actually part
of the same continuum and they are closely bound together in a symbiotic relationship.
Port regionalisation depends much on the cargo support from the hinterlands, which
have two directions, landside and seaside. As ports have strong links with the inland
dimensions, the port foreland proximity and hinterlands production and consumption
base have enlarged. The increasing cargo availability and port regionalisation have
triggered changes in larger vessel size with fewer calls and better liner services
(Notteboom and Rodrigue 2005; Mangan et al. 2008).
Port regionalisation is supposed to reduce the inland access costs by one third, which
account for 18% of the total logistics costs globally (Stopford 2002). Corridors and
28

inland terminals are cornerstones in port regionalization. Similarly, freight distribution

centres and development of a broader regional load centre come to the fore for valueadded logistics and port regionalisation, which play the role of growth pole in serving
large logistics poles at the transport nodes (Notteboom and Rodrigue 2005).
The scope of port hinterlands varies. The country border is no longer a constraint or
limitation on port development. The European Unions (EU) becoming a single market
in 1993 has led to European integration. This indicates that previous country-specific
logistics strategies are not optimal any more (O'Laughlin et al. 1993). The Oresund
region is another example indicating that regions should go beyond country borders to
make logistics more efficient. The new bridge over Oresund has brought a
psychological importance as a visible symbol of coherence and physically linked
Copenhagen and Malmo, although the research findings by Skjott-Larsen et al. (2003)
show that these two cities still use separate logistics structures for customers.
The ten ASEAN countries are the Asian counterpart to the EU. Despite the attainment
of free trade within the bloc, conditions are tougher than in Europe or North America
for their logistics. The ASEAN country governments maintain protectionist measures
due to their underdevelopment. Bookbinder and Tan (2003) suggest that ASEAN
performs as a whole region rather than individual countries to improve the logistics
performance.
EU, Oresund and ASEAN are cases depicting that port hinterlands can extend across
borders. There are other cases where port hinterlands are smaller than a nation. In the
USA, New Jersey, Long Beach, and the Great Lakes are different regions, and their
logistics performances vary. In the UK, the southeast area logistics performance is
different from that of the Yorkshire and Humber region. In China, the inland west
logistics is different from that of the Pearl River Delta and that of the Yangtze River
Delta. Within the region, the management system, the government policies, laws and
regulations are the same, which results in frequent economic transactions and economic
coordination, which makes regional port research more logical and feasible. These
examples have shown that regional ports are practical. The different ports perform
differently. Why they perform differently and how their performance can be improved
is worth researching. Before investigating ways of improving port performance, the
factors influencing performance need identifying. However, there is a gap in the
literature for factors influencing port performance, which makes the current research
significant.
29

2.3 Relevant theories underpinning port performance

There is no suitable theory underpinning factors influencing port performance. However,
some relevant theories are available and will be reviewed in this section.
2.3.1 Stakeholder theory
According to Freeman and Reed (1983), stakeholders refer to any identifiable group or
individual who can affect or be affected by the achievement of an organisations
objectives. As different stakeholders have different and competing interests, perceptions
and ideas (Castro and Nielson 2003), they see their own interest without appreciating
what is important to others. Hence, the interests of stakeholder groups constitute diverse
sets of expectations, needs and values (Harrison and John 1994). This diversity of
interests causes a potential problem: failure to satisfy one particular stakeholder may be
detrimental to the others (Freeman 1984) due to resource scarcity and managerial
incapability (Mahoney and Pandian 1992). To balance the interest of different
stakeholders, stakeholder theory says managers should make decisions by considering
the interest of relevant stakeholders (Sternberg 2000). This theory is critically important
as contemporary firms must satisfy a variety of stakeholders to survive in a volatile and
uncertain environment (Foley 2005).
The importance of stakeholder orientation comes from several areas: a number of
studies suggest stakeholder orientation is positively associated with performance
(Freeman 1984; Greenley and Foxall 1997; Clarkson 1995). A stakeholder orientation is
a condition for excellence, as stakeholders are not isolated from each other; one
stakeholders success is dependent on others (Polonsky 1995). The latest development
initiatives such as the Global Reporting Initiative (GRI) (Hedberg and Malmborg 2003),
the Dow Jones Sustainability World Index (DJSI world), the United Nations Global
Compact (Kell 2005) and the Ethical Trading Initiative (ETI) (Blowfield 1999) have
shown emerging evidence that sustainability is stakeholder orientated. The stakeholder
theory implies that all the relevant port stakeholders need to be considered when the
port scheme is stipulated.
2.3.2 SCP paradigm
The structure-conduct-performance (SCP) paradigm was first raised by Bain (1956) and
Scherer (1980). The tenet of the SCP paradigm is that the industrys structure influences
the industrys conduct, which in turn influences the economic performance of an
industry (Bain 1956). In terms of port sector, port economic performance is measured
30

by profitability, value-added, technology development and employment; conduct refers

to the port activities; and structure is mainly defined by the degree of concentration and
market share distribution (Ormanidhi and Stringa 2008). Structure is the determinant of
conduct, such as the number and size of buyers and sellers, technology, the degree of
product differentiation, the extent of vertical integration, and the level of barriers to
entry (Scherer 1980).
Structure

Conduct

Performance

Figure 2. 5 Structure-conduct-performance, adapted from Bain (1956)

There are three main causal relationships between S-C-P, and the most important one is
that structure impacts performance, see Figure 2.5. SCP is criticized, however, as it
lacks a more explicit analysis of the firm's actions and its ability to influence its
performance.
2.3.3 PESTEL analysis
The factors in the macro-environment may affect the performance of an industry, and
the factors can be categorised by employing the PESTEL model, see Figure 2.6.
PESTEL is an acronym for Political, Economic, Social, Technical, Environmental and
Legislative (Armstrong 2006). This framework provides a strategic technique to analyse
the external macro-environment of a business or industry and identifies the strategic
factors that influence the business. It ensures that some basic factors are not overlooked
or ignored. The PESTEL framework is a simple way to encourage the development of
external and strategic thinking, but it may over-simplify the data for strategic decision.
Nor does it investigate internal factors. As the macro environment often changes,
PESTEL analysis needs undertaking on a regular basis.
Political
Economical

Legal
Business
/industry
Environmental

Social
Technological

Figure 2. 6 PESTEL analysis model

31

2.3.4 Three-factor theory

Research into customer satisfaction suggests that service attributes fall into three
categories with a different impact on customer satisfaction, which is known as 3-factor
theory (Matzler et al. 1996; Oliver 1997; Matzler et al. 2003). The first category is basic
factors, known as dissatisfiers. They are minimum requirements that produce consumer
dissatisfaction when not fulfilled, but do not result in customer satisfaction when
fulfilled or exceeded. Their negative performance has a greater impact on overall
satisfaction than positive performance. The second category is excitement factors,
known as satisfiers, which increase customer satisfaction when delivered, but cause no
dissatisfaction if not delivered. Their positive performance has a stronger influence on
overall consumer satisfaction than negative performance. The third category is
performance factors, which produce satisfaction when performance is high and produce
dissatisfaction when performance is low.
These four theories are related to this research. Concerning stakeholder theory, this
research involves relevant stakeholders as sources of empirical data to reflect different
stakeholders views on port performance. Regarding the SCP paradigm, as structure
influences performance, the structure of ports is investigated to find out whether port
structure influences port performance. As for PESTEL theory, external factors are
analysed to identify different factors influencing port performance. With regard to threefactor theory, the factors influencing port performance are categorised to benefit port
managers by highlighting different implications.
2.4 Trends in maritime freight transport
Maritime industry has been developing and some trends in maritime freight transport
and the port industry have emerged as follows:
2.4.1 Up-scaling of vessel size
Underpinned by economies of scale, container ships have experienced the development
of six generations (Rodrigue et al. 2009), see Figure 2.7. Maersk announced in February
2011 that their new vessels with the capacity of 18,000TEUs would be put into use in
2013. In an attempt to win market share, shipping lines invested in larger vessels that
are safer, faster and more efficient at lower cost (Cullinane and Khanna 2000). Not only
are the sizes of deep-sea container ships increasing, but also the sizes of the feeder

32

container ships are being up-scaled. The research by Ng and Kee (2008) shows that
optimal sizes of feeder containerships in intra-Southeast Asia will increase by 2015.

Figure 2. 7 Six generations of container ships

(Source: Rodrigue et al. 2009)

The increasing vessel size can reduce logistics cost but has profound influence on port
development. Firstly, it has put pressure on port facilities and landside infrastructure, as
not all ports can accept the call of large vessels. The pressure includes deep water berths,
cranes, trucks, a large amount of back-up land, storage and warehousing, anchorages,
tugboats and pilot launches. This may involve investments in infrastructure such as
better access to ports by dredging, extending and supporting existing quays, or
providing breakwaters. At the same time, the port technical infrastructure should be
improved, as larger vessels require ports to provide better superstructure and larger
terminal capacity to load and discharge cargo, such as better cargo handling equipment
of cranes and storage facilities, height of bridges and navigation channel safety
(UNCTAD 2009).
Secondly, to make the most use of port infrastructure and superstructure, an effective
operational system is required to achieve quicker moves per hour, as larger vessels
require more efficient port operations. Larger size ships have pushed ports to improve
their productivity and operations efficiency. For example, the loading/unloading
efficiency should be 300 moves/hour to cope with a vessel with over 3,000 TEUs, twice
the current container operations efficiency (UNCTAD 2000). Thirdly, larger vessels
require direct intermodal connections, often via on-dock rail so that no congestion
happens at the port. Fourthly, larger vessels require a very good port location, as larger
33

vessels call at fewer ports to save transit time. They require the ports to be rich in cargo
resources, as fewer calls would reduce the port charges but increase the cargo volume. If
the volume is insufficient (utility rate is below 60%) to fill the container vessels, the
vessel would suffer loss (UNCTAD 2000).
Lastly, the increasing ship size and further concentration of power into fewer
megacarriers make the main players more competitive for mainstream liner business,
whereas the small players are forced to niche markets (UNCTAD 2000).
2.4.2 Shifts in supply chains and port logistics integration
Supply chains are stretching with increasing economic globalization and the efficiency
of supply chains is becoming an essential component in the worldwide flow of goods
and services. The success of a port depends on the ability to integrate the port
effectively into the networks of business relationships that shape supply chains
(Notteboom and Rodrigue 2005). In other words, the success of a seaport no longer
depends solely on its internal weaknesses and strengths. It is more and more determined
by the ability of the port community to fully exploit synergies with other transport
nodes and other players in the logistics networks.
The integration strategies of the market players have created an environment where
ports are increasingly competing within transport chains or supply chains (Notteboom
2006). This implies that a ports competitiveness has become increasingly dependent on
external coordination and control. Port choice has become more a function of network.
Port selection criteria are related to the entire network, where the port is just one node.
Major port clients concentrate their service packages not on the ports sea/land interface,
but on the quality and reliability of the entire logistics chain. Capturing and keeping
important clients on a sustainable basis requires integrated services characterised by a
high level of reliability and flexibility, short time-to-market, and transparency within
efficient governance structures (Notteboom 2006).
The shifts in supply chains have enabled ports to be either directly or indirectly
involved in the vertical and horizontal integration undertaken by many international
shipping lines and logistics service providers, with the context of world economy
integration, free trade, containerization and information system support.
Horizontal integration between shipping lines
The large shipping lines cooperate all over the world for cargo resources. Mergers and
acquisitions (M&As) facilitate risk sharing as well as improving shipping frequency
34

(Cullinane et al. 2002). The most important alliances are the Grand Alliance (P&O
Nedlloyd, OOCL, Hapag-Lloyd, NYK and MISC), the Cosco/K-Line/Yangming
Alliance, the United Alliance (Hanjin and Senator) and the New World Alliance (APL,
Hyundai and Mitsui OSK Lines) (Notteboom 2006). The (M&As between Maersk and
Sealand (1999), between P&O and Nedlloyd (1997), between Singapore Neptune Orient
Lines (NOL) and APL, Hanjins buying 70% of DSR-Senator, Sinotrans merging with
China Yangtze Navigation Group, CMAs acquisition of CGM and CGT, CPs takeover
of a number of small container lines, exemplify the horizontal M&A of shipping lines.
The strategic alliances provide their members with easy access to more markets or
services with lower cost implications and allow them to share terminals and cooperate
in many areas at sea and ashore. Carrier M&A aims to gain greater concentration in the
shipping lines industry, to achieve efficiency, and to win more market share and enjoy
market power. They represent a massive concentration of power in the container
shipping industry. The M&A enables more capital available for investment in larger
vessels, to achieve economies of scale without creating a new business entity.
Maersk website publishes that Maersk Line is the largest shipping company worldwide,
accounting for 17% of the world container market with over 500 container ships and
1.5million containers. The top three carriers APM-Maersk, Mediterranean Shipping
Company and CMA CGM Group account for 35% of the world containers. The top 20
container carriers capacity accounted for over 80% of the world shipping capacity in
2009. Figure 2.8 presents the top 10 container operators in terms of container TEU and
market share.

Figure 2. 8 Top 10 container operators by TEU in Nov. 2009

Source: http://www.axs-alphaliner.com

35

As global liner operators, Maersk Sealand, MSC, CMA-CGM and P&O Nedlloyd have
a strong presence in both primary and secondary routes. MOL and Evergreen have
explored secondary routes such as Africa and South America, while APL, Hanjin, NYK,
COSCO and HMM focus on intra-Asian trade, trans-Pacific trade and the EuropeFar
East route. Many carriers have allocated 7080% of their capacity to a strategic alliance
(Notteboom 2004; Notteboom 2006).
Carrier M&As provide members with the opportunity to justify investments in larger
ships and enable more purchasing power in negotiations with ports and terminals
(Cullinane 2004). The carriers are operating not only in a market but as key players
embedded in supply chains. They are networked third party service providers that can
intervene between sellers and buyers. The services depend on their capability and
knowledge. Liner service network design has tended to move from a pure cost-driven
practice to a more customer-oriented differentiation practice, as the optimal network
design is not only carrier-specific, but also to meet shippers needs and to motivate
shippers willingness to pay for a better service (Notteboom 2006).
Vertical integration between ports and carriers
Containerization has promoted the cooperation of ports and carriers to reduce the risks
of investment in new container terminals. The shipping lines are expanding their scope
to terminal operations and hinterlands transport, having dedicated terminals, liner
owned agencies (LOA) and getting involved in inland transportation (Notteboom and
Winkelmans 2001). In the strategies of vertical integration, ocean carriers have engaged
in ownership restructuring to improve operational efficiency and reduce port costs due
to increasing pressure from globalization of shipping and trade (Mangan et al. 2008). In
this way, carriers are becoming more involved in port management than before. Based
on the extent of the carriers relative participation in international, regional or local liner
shipping networks, they tend to fulfil different types of role into different ports
(Cullinane 2004).
A.P. Moller-Maersk is the largest container ship operator in the world, with its
headquarters in Copenhagen, Denmark. Maersks APM Terminal branch is the second
largest container operator worldwide. Maersk started container terminal investment in
China from the 1990s, due to Chinas booming economy and international trade. The
first terminal investment was Yantian in 1994, and then the investment extended to
Dalian

(1997),

Shanghai

(2003),

Qingdao

(www.maersk.com).
36

(2003),

and

Xiamen

(2004)

Following the recent trends of vertical integration by carriers into terminal leasing or
ownership, carriers are sometimes associated with port management. In such cases, the
carriers and shippers are part of the integrated port management system. That is to say,
the port authority, the carriers and shippers all compose an integrated port management
system (Bichou and Gray 2004). However, integration of international logistics
channels is not easy, although M&A have become popular. For example, it is difficult
for shipping lines and ports to integrate as both parties try to optimize the use of their
respective assets (ships versus berths and warehouses).
In the liner shipping industry, wider geographical coverage and cost reductions through
economies of scale are the underlying reasons for horizontal and vertical integration
strategies through mergers and acquisitions or strategic alliances (Souza et al. 2003).
Horizontal integration between ports
Port horizontal integration means port networking with overseas, neighbouring and
inland ports, involving the port authorities policies and the joint use of scarce resources
(Notteboom and Winkelmans 2001). The strategy of horizontal integration is seen in
port co-operation and mergers, for example, cooperation between Shanghai and ASEAN
ports, between Xiamen, Zhangzhou and Quanzhou ports, between Shenzhen,
Guangzhou and Hongkong, between Copenhagen and Malmo Ports.

Horizontal

integration is also seen in the expansion of certain ports beyond their initial spatial bases.
2.4.3 Global port/terminal operators (GPOs)
To reduce cost and improve efficiency, shippers would seek carriers to provide efficient
and cost effective services, while carriers would seek cost reduction and operation
efficiency at the ports they use (Mangan et al. 2008). According to a report by Drewry
(2010), Hutchison Port Holdings (HPH), APM Terminal, PSA, DP World, China Ocean
Shipping Company (COSCO), Eurogate, Evergreen, NYKLINE, SSAMARINE and
P&O are the leading port operators worldwide. The smaller terminal operators cannot
compete against the major players but concentrate on niche markets.
In order to respond to the concentration trend of shipping lines, the terminal operators
have been seeking scale increase. A number of global port operators (GPOs) and
international terminal operators (ITOs) have emerged that increasingly control and
manage a number of ports worldwide. For example, P&O ports have joined Hutchison,
PSA in Singapore and APM Terminals. A.P. Moller - Maersk Group (Copenhagen)
operates 50 terminals worldwide as explained earlier. Dubai Ports World (DPW) was
37

created by a merger between the Dubai Ports Authority (DPA) and an international
business, DPI Terminals. In 2006, DPW purchased P&O of UK, which was then the
fourth largest ports operator in the world. DPW operate 19 major ports worldwide.
Hutchison Whampoas subsidiary Hutchison Port Holdings operates in five of the seven
busiest container ports in the world, handling 13% of the worlds container traffic
(www.hph.com). Hutchison owns and manages terminals in Shanghai, Xiamen and
Yantian. The Port of Singapore Authorities (PSA) owns and manages ports and
terminals in other countries. Global terminal operators clearly have shifted their mindset
from a local port level to a port network level. In this sense, ports are no longer
perceived as non-moveable assets (Bichou and Gray 2005).
The top 10 container ports ranking in 2009 by AAPA shows that 70% of the top 10
container ports by tonnage are from China. Among the 10 ports, only Rotterdam is
outside Asia. In terms of container TEUs, 8 out of the top 10 container ports are from
Asia and 6 out of the top 10 ports are from China. The increasing trend in both tonnage
volume and TEU throughput increase in the past 20 years shows that Asian, especially
Chinas freight, accounts for a large share. The ranking positions are also evidence that
the dominant international trade is with Asia and China. This explains why GPOs
concentrate their investment in China.
With the increasing global scale of operations, the large port operators are in a position
of potential market domination, which may affect free choice and reduce competition
(Souza et al. 2003). Other major regional port operators, such as ABP in UK and Dubai
Port Authorities in the UAE, have also expanded their activities internationally with
considerable specialisation

and international

expertise in

container terminal

management and development.

It should also be noted that not all terminal operators are integrated by M&A. Effective
network integration can be realised through better coordination with 3PL or other
logistics service providers. The literature has paid much attention to vertical and
horizontal integration including ports in the logistics chain, but it overlooks integration
of the various activities in the port organisation itself (Bichou and Gray 2004). This is
mainly due to the complex organisational structure and management of ports, which has
always been a central issue of port management and a major obstacle to the
development of a comprehensive conceptual framework of port management.

38

2.4.4 Powerful port users

According to Notteboom (2006), different firms exert different levels of power in a
supply chain. Logistics integration in the transport industry results in a concentration of
power at the port demand side. Seaports increasingly have to deal with large port clients
who possess strong bargaining power on terminal and inland transport operations.
Ports and port authorities essentially have to deliver values to each customer and
capture values. This demands the identification of what various customers want and
how port managers can play a role in the value creation process. In the contemporary
logistics-restructured port environment, it has become more difficult to identify the port
customers that really exert power in the logistics chain. In some cases, the chain
manager is situated at the end of the chain. For example, supermarket chains (such as
Wal-Mart, Carrefour) exert power over the supply lines of food products. Large
forwarding agencies negotiate rates with shipping lines and route the cargo they manage
according to a combination of determinants such as price, transit time and reliability.
Large shippers often have direct contracts with one or more shipping lines for their
worldwide shipments. They decide which port to choose depends on the type of cargo
involved, the cargo generating power of the shipper, the characteristics related to
specific trade routes, the terms of trade, terms of sale and minimum cum cost
(Notteboom 2006).
Mega shippers are sometimes perceived as port owners by operating dedicated oil or car
terminals. BP Chemicals in Hull, for example, has leased two jetties from ABP (the port
authority) to handle its chemical products and raw materials. Another example is GBA
Group operations in Immingham. GBA leases the Immingham terminal as its dedicated
car terminal for its logistics activities at the port.
Wal-Mart in South China has long-term contracted factories in Huizhou and Shenzhen
that are very close to Yantian Port in the Pearl River Delta. Wal-Mart annually imports
576,000TEU to US from China, which is up to 10% of its imported products (Francis
2007). This has enabled Wal-Mart to have a special relationship with Maersk, which has
purchased a minority of stakes in Yantian International Container Terminal Ltd (YICT)
from Hutchison Whampoa. This means that the three large firms of Wal-Mart, Maersk
and Hutchison Whampoa are strongly interlinked.
The purchasing power of large intermodal carriers, reinforced by strategic alliances
between them, can play off one port or group of ports against another. Because of the
39

sheer size of the port users, the loss or the acquisition of a customer such as a container
carrier may in some cases imply losing or acquiring 10-20% of a ports container traffic,
such as CAST to Zeebrugge

and Antwerp (Notteboom and Winkelmans 2001;

Notteboom 2006).
2.4.5 An increased focus on landside and intermodality
Traditionally, port competition concentrated on waterborne transport. It is no longer the
case. From a carriers standpoint, the maritime container battle will be won on land
(Notteboom and Winkelmans 2001). Inland transport, which accounts for 40-80% of
their total costs, is identified as one of the most vital areas left to reduce cost by smarter
management (Notteboom 2006). Moreover, the port authorities can promote an efficient
intermodal system to secure cargo from inland hinterlands. The logistics management of
JIT inventory management, SC integration and logistics information system support can
reduce the cost. Hutchisons focus on inland logistics in China is an example.
Robinson (2006) proposes a strategic framework for port-oriented landside strategy in
Australia. The value has migrated from port operators to the logistics service providers
(LSPs) such as 3PLs and 4PLs. He claims that inappropriate strategies may deliver
wrong outcomes. The landside chains are supposed to be integrated by four fundamental
patterns, namely, a rail/intermodal terminal path, a road/depot path, a direct road haul
pattern and a truck-linked depot pattern that are mainly linked to the terminal.
Harding and Juhel (1997) note that the future of inland logistics centres or dry ports
(moving the port to the inland area to get more cargo sources and larger hinterland area)
for logistics operations is not limited to the seaport area. The port system serves not
only as a transport system, but also as a major sub-system of the broader production,
trade and logistics systems. The port core businesses then vary greatly and some ports
even shift to non-ship/cargo related activities. The location of port activities has actually
extended from the sea/shore interface to landside development for some ports.
Intermodalism is recognised as the main concept associated with supply chain
integration in port (Bichou and Gray 2004). Intermodalism refers to interlinks between
different transport modes and nodes, such as sea/road, sea/rail, sea/inland waterway
links. In the intermodal transport networks, ports play a vital part to link transport by
sea, road and rail (Klink and Berg 1998). Bichou and Gray (2004) see round-the-world
trips, triangular routes, hub and spoke systems as patterns of sea-borne trade, whose

40

development requires typical partnerships which are beneficial to all members in the
intermodal chain.
The literature highlights the future of ports as nodes in the changing patterns of
maritime and intermodal transport. Freight intermodality is increasingly considered as a
major potential contributor to solving the problem of cutting cost for broader
hinterlands transport. The shipping lines, the shippers and local logistics service
providers are making efforts to make use of this strategic option to reach hinterlands by
longer distance to get more resources of cargo and serve more customers at lower cost.
Islam et al. (2006) promote development through multimodal (intermodal and
multimodal are often used interchangeably) freight transport in Bangledesh. They found
government play a key role in deregulation to promote this.
However, despite the efforts made, such as considerable investment in dedicated
infrastructure, and despite the increasing awareness that a higher intermodal market
share would generate economic and environmental benefits, road still remains the main
transport mode for cargo transport in Asia and in Europe. Intermodal options have not
been successfully employed. For example, in Europe, only 10% of the total volume of
freight movements is carried out by intermodal options (Ricci and Black 2005). The
poor market performance indicates an overall lack of competitiveness of intermodal
transport services. Ricci and Black (2005) identify the reasons for limited intermodality
as a combination of the inadequacy of the existing infrastructure, the intrinsic
complexity of the industry, the extensive role of the private sector and the lack of an
appropriate integration platform. Cargo interests should all have access to door-to-door
services with multimodal transport (Islam et al. 2005).
The liner shipping market is an internationalised, service-provision and exceptionally
unstable market (Robinson 2004). Transit time is often balanced against cost. As long as
the customers are aware of a specified date or time of their goods arrival, it may be
possible to use less expensive and slower modesvessels. Therefore, it is very
important to facilitate and expedite the transfer of shipments between freight
conveyances (for example, vesselrailroad, vesseltruck).
Klink and Berg (1998) find that gateways are in an excellent position to stimulate
intermodal transport, as they can generate scale advantages in inland transport. For
example, Guangzhou and Shenzhen are the gateways to compete against Hongkong
because they have cost advantages in port operations, trucking and barging.
41

2.4.6 Port-centric logistics

In contrast to the shift of port activities to in-land dry ports, with the role changing,
port-centric logistics is emerging and being promoted. Analytiqa (2008), a UK market
analysis and business intelligence company, suggests that port centric logistics may be
the next important thing in supply chains. Mangan et al. (2008: p.36) define port-centric
logistics as the provision of distribution and other value-adding logistics services at a
port. They note wider profit margins come from non-core port activities other than
providing terminals, berths. Port-centric logistics has the advantage of being close to the
port and provides logistics operations from the ports, rather than moving containers on
roads to inland distribution centres. Hutchison, for example, announced that London
Thamesport provides integrated port-centric logistics as UKs only automated port with
70,000m2 of warehousing space, good location, excellent facilities and good landside
links by motorway and rail.
UK retailing and manufacturing are increasingly reliant on imports, whereas ports can
provide import processing and distribution centres in the port bonded areas. One
employment of this concept is to establish distribution centres at the port instead of
inland. These can be exemplified by the Sainsbury Regional Distribution Centre (RDC)
at Felixstowe and ASDA-Walmart RDC at Teesport. ASDA (the UK arm of Wal-Mart)
and Baird Menswear, the two key UK retailers, have already been attracted to locate
their distribution centres in Teesports bonded area and hold the goods until required,
then taking them direct to the end customer (Wall 2007). This practice of port-centric
logistics contrasts with the prevailing UK logistics model of hauling containers to
central distribution centres (DCs) and back-hauling empty containers to ports. It adds a
green advantage of significantly reduced goods miles.
The port-centric logistics concept requires ports with deep-water capacity and spatial
port-side land. Teesport has 15m depth in the main channel and excellent support
infrastructure, a legacy from Teesside's chemical and steel production base. PD Ports
would invest in infrastructure, services and equipment within Teesport, to position it as
the northern gateway in the UK for containerised cargo traffic.
The electronic data interchange (EDI) development, tracking and tracing system should
be improved in response to the port-centric logistics (Carbone and Gouvernal 2007). As
port-centric logistics has enlarged the port activity area, it needs an advanced

42

information and communication technology system to link different port stakeholders so

that the communications between them are efficient.
2.4.7 Port ownership and privatisation
The relationships between ports and governments have changed profoundly (Brooks
and Cullinane 2007). The government used to manage ports as state-owned property.
Port privatisation started in the 1970s (UNCTAD 1999). Many ports have since then
become privatised for better management and better investment. In the 1980s and 1990s,
ports and ports authorities experienced structural and functional changes from public to
privatized entities (Robinson 2002). Many ports have turned to privatisation as they
believe that increasing private sector participation in port ownership and port operations
can help them with the improvement of operational efficiency and performance. This is
in line with the principalagent theory that private ownership should be more efficient
than public (Kangis and Kareklis 2001).
In the port sector, some empirical studies show that port ownership has an effect on port
efficiency (Cullinane et al. 2002; Estache and Gonzalez 2002) while many other studies
show no clear relationship between port ownership and port operations efficiency (Liu,
1995; Notteboom et al. 2000 ). To further investigate the efficiency of port ownership,
Tongzon and Heng (2005; 2007) quantify the relationship between port ownership
structure and port efficiency. The results show that private sector participation in the
port industry could improve port operations efficiency to some extent, which in turn
would increase port competitiveness. They find that full port privatisation is not an
effective way to increase port operations efficiency and the best extent of private
participation in container ports/terminals is the mode of private/public with privatisation
percentage of 0.67-1.00. This means that port authorities should introduce private
finance, operation and management instead.
Baird (1995), Cullinane and Song (2002) provide four models of port ownership and
administration: public port, public/private port with the public sector dominant,
private/public port with the private sector dominant, and private port. They note that
port ownership may hinder the performance of the ports due to institutional differences.
Cullinane and Song (2002) note that most of the top container ports in the world are
public/private. Serebrisky and Trujillo (2005) note that restructuring and deregulation of
ports in Argentina in 1990s increased the efficiency and service of the ports, and
reduced the size and role of the public sector in ports. The reform resulted in significant
43

improvement of efficiency and reduced 50% of the container terminal handling cost
within five years.
Full privatisation sparks internal competition and facilitates cooperation with its
immediate neighbours (Button 2008). Most Chinese ports are pure public ports while
most UK ports are pure private ports. ABP (Associated British Ports), the UKs main
private port operator, currently own 21 ports that account for 25% of the UKs port
activity in terms of cargo volume. Singapore is a private/public port while Shanghai
Port is an example of public/private port.
Investors are very interested in privatised ports (Mangan et al. 2008). For example,
Hutchison has invested in the International Container Terminal in Haicang port, Xiamen,
which is only 1.5km from the Xiamen Export Processing Park and 100m away from the
largest Logistics Free Trade Zone. Hutchison has also invested a big share in Yantian
(opposite to Hongkong) and Waigaoqiao & Yangshan port in Shanghai. PD ports were
acquired by the Australian investment company Babcock and Brown Infrastructure Ltd
in late 2005. They were sold to the Canadian Group, Brookfield Asset Management in
Nov. 2009, and ABP was taken over by Admiral Acquisitions UK Ltd in 2006.
Carriers ownerships change when they vertically integrate into ports; shippers have
started to own and operate the ports/terminals; companies with financial strength may
own ships and they are sometimes perceived as port managers at dedicated oil or car
terminals, and have been acquiring terminals to create terminal operators, e.g. Wal-Mart.
In these cases, the carriers, shippers and port/terminal operators have bargaining power
and negotiation strength over the port authorities and have improved port performance.
Baird (2002) studied the survey on the worlds top 100 ports by the International
Association of Ports and Harbours (IAPH) and found the main advantages of
privatisation are sharing investment, improving productivity, helping trade growth and
management expertise, making terminals profitable, keeping carriers in a port,
improving management and better facilitation of development. The disadvantages of
privatisation are identified as loss of control, political and commercial ambiguity,
difficulties in operator selection and lengthy process for securing concessions.
Looking at port performance by both private and public ports, pure public and pure
private ports are not very successful. Partial public (for example, Shanghai) and partial
private ownership (for example, Singapore) seems to be more effective.

44

2.4.8 Green logistics and the supply chain

Emissions such as carbon dioxide (CO2) are widely known to have impact on the world
climate and various technological means have been tried to reduce. Measures to curb
future CO2 growth are being sought with a high sense of urgency. Among the different
transport modes, sea shipment has much lower emissions of CO2 than air, road and train
transport, according to Maersk lines. Reduction of emissions has become top priority
for the world environment. Hence environmentally friendly logistics is promoted by
many researchers such as Plambeck and Denend (2008), who conducted a case research
of greening Wal-Mart. They found that putting pressure on suppliers to produce and
promote environmental sustainability is one way to exert a positive influence on society.
As serious environmental problems have arisen from the tremendous economic growth,
concerned citizens world-wide have increasingly reacted to the threat (Wu and Dun
1995). Both governments and businesses are urged to respond to the issues and
environmentally responsible logistics is promoted. Working cooperatively with
government and nonprofits is another way to promote a greener logistics and supply
chain. Many countries in Europe have thus regulated emission standards and other
environmentally related activities. Environmentally friendly logistics promotion will
enhance sea and water shipment.
2.5 Challenges
Globalization has pushed ports to evolve rapidly from being traditional land/sea
interfaces to providers of complete logistics networks. This means that ports have to
face many challenges due to unpredictable environmental changes and trends in the
shipping, port and logistics industries.
Load centres are locally generated and stimulated by ports centrality regarding strong
regional hinterlands (Notteboom and Winkelmans 2001). Inter-port competition has
intensified and the European ports competition focuses mainly on the facility capacity
to attract the maximum container volume to justify the direct calls.
Notteboom and Rodrigue (2005) note that ports are facing a wide array of local
constraints which negatively influence their growth and efficiency, such as depth of
water, land, local rail and road system constraint, environmental constraint, local
community opposition to port development. There is substantial pressure for port
facility improvement because deep-sea liners are often overly ambitious in ordering and
45

deploying mega-containerships (Ng and Kee 2008). Ports are also facing challenges to
be more secure. For example, regulations on security and environmental protection
increasingly occur, such as the International Ship and Port Facility Security Code,
which became effective from 2004 (Notteboom 2006).
Identifying the real chain manager/decision maker is a key challenge to port managers.
If port authorities want to attract or retain the megacarriers, they have to position the
port as an efficient intermodal hub and distribution service centre acting within
extensive transport and communications networks. To be successful, port authorities
have to think along with the customer, trying to figure out what his needs are, not only
in the port but also throughout the logistics chains and networks (Notteboom 2006).
This demands the creation of a platform in which various stakeholders (carriers,
shippers, transport operators, labour and government bodies) are working together to
identify and address issues affecting logistics performance. Port authorities can be a
catalyst in this process, even though their direct impact on cargo flows is limited.
The port authorities need to adapt to the changing environment in which the port users
are becoming more powerful. Much attention needs to be paid to the carriers that are
trying to expand their supply chain to include terminal operations to improve their
terminal operation performance and to integrate door-to-door transport (Notteboom
2006). This indicates that ports are customer-oriented property. Port authorities should
have a good understanding of their customers needs; otherwise they would lose the
customer, e.g., PSA has lost its two most important clients (Yap and Lam 2006; Lam
and Yap 2008).
Another challenge ports are facing is unbalanced freight movements, the outcome of a
global reorganisation, which are leading to disequilibrium in the division of labour,
trade, production and consumption (Notteboom 2006). The worlds ports have to
develop their physical infrastructures to expand their port hinterlands through
introducing free trade zones with a hope of developing hub ports and international
logistics centres to cope with the challenges. In addition, many ports have been carrying
out port reforms such as port governance restructuring and deregulations, private and
public partnership.
Bichou and Gray (2004) note that ports rarely control logistics channels, despite their
important roles. They argue that global port operators (GPOs) may control logistics
channels but they often have other business interests such as shipping lines. The ports as
46

non-movable assets are facing growing pressure from shippers and shipping lines who
are not bound to particular ports, which does not encourage a close collaboration or a
long-term partnership among channel members in the port and shipping industry.
The port operators/authorities have concerns about the current practices by shipping
lines and freight forwarders because they are showing less loyalty to specific ports
(Slack et al. 1996). They may suddenly change the port of call or operations without
notice. Ports face the constant risk of losing important clients, not because of lack of
port infrastructure or poor quality of terminal operations, but because the client has
rearranged its service networks or has engaged in new partnerships with other carriers
(Notteboom and Winkelmans 2001). This has pushed ports to become interested in
collaborating and having partnership with other ports to benefit all participants. Thus,
this variable is not fully correlated with port specific variables, such as efficiency and
reliability, so it should be included as an independent port competitiveness indicator.
Other challenges (UNESCAP 2005) that have emerged are as follows,

global trends of logistics network restructuring and reposition of regional and/or local
distribution centre

rapid growth in volume of world seaborne freight, both in volume and in container

increase of transhipment cargo and competition among ports and terminal operators

introduction of the super mega size containership

emerging global terminal operators and their growing market share

intermodal transport strategically between ocean, rail, road and inland waterway

high cost and constraints for developing port facilities.

2.6 Chapter summary

This chapter started with the definition of logistics and supply chain management. Then
port activities, roles and functions, ownership, development and change were reviewed,
which gave an overview of the port sector. This was followed by descriptions of the
trends of maritime shipping industry to figure out where the current ports are going and
how they should cope with the trends. Lastly, the challenges for ports were briefly
addressed. The next chapter will focus on port selection and performance measurement.

47

3. MEASURING PORT PERFORMANCE AND FACTORS

INFLUENCING PORT PERFORMANCE
The main objective of this chapter is to review the relevant literature on port
performance measurement and the factors that influence port performance.
The chapter consists of six main sections. The first section reviews the components of
the logistics system for ports, namely, institutions, infrastructure, participants and
logistics service providers. The second section reviews the literature on port
performance measurement, including the importance of performance measurement,
national logistics measurement, trading logistics measurement and port performance
measurement. The third section presents the factors leading to the success of some ports
in history and nowadays, which builds experience for developing successful ports. The
fourth section reviews the criteria of port competition and choice. The fifth section
brings together the individual strands of the literature review and presents potential
factors that influence port performance. The last section provides a chapter summary.
3.1 Components of a logistics system for ports
For the port system, to what degree it can reduce the system cost and improve the
service level depends on the efficiency of port operations and port authority
management, which not only determines the efficiency of the whole port system, but
also induces the sustainable development of the port vicinity. For the port hinterland
economy, port activities are of substantial importance, and the activities are
geographically concentrated on a limited number of regions where the geographical
conditions are favourable (De Langen 2003).
According to the Asian Development Bank (Banomyong 2007), macro level logistics
systems consist of four components, namely, (1) shippers, traders and consignees; (2)
public and private service providers; (3) regional and national institutions, policies and
rules and (4) transport and communications infrastructure. Components (1) and (2) are
the participants, component (3) provides conditions to support the regional logistics and
component (4) offers the hard physical prerequisites for port performance. As ports
need to work towards maintaining a competitive edge by developing an integrated
approach to the logistics system, this section will introduce the four components.

48

3.1.1 Institutional framework

Ports that top the AAPA and LPI rankings are typically hubs and key players in the port
sector in relaxed constitution, like Hongkong and Singapore. Ports at the bottom of the
AAPA ranking are typically trapped in a vicious circle of overregulation. A
comprehensive reform of logistics and trade facilitation is thus essential. This suggests
that policymakers should initiate a strategic role to promote the regional port
performance with government support, which includes ease of shipment, simple
documents and effective port governance (Wang et al. 2004; Arvis et al. 2010)
Port governance refers to a set of institutions and actors drawn from and beyond
government (Stoker 1998). The governance provides a useful analysis for a single port
or a regional port system which has been deeply influenced by globalization, coupled
with complex forces from region-specific or city-specific configurations of
administrative structures and political systems (Wang and Slack 2004). The port
authority should have a clear insight into market dynamics and avoid over-optimism,
which leads to overcapacity, redundancies and cutthroat competition (Notteboom and
Rodrigue 2005).
Preferential policies on customs, border inspection and tax
As the port economy has a very close relationship with the neighbouring countries, the
port authority should provide special services of customs, salvage and admiralty court,
apart from the general logistics services (Arvis et al. 2010). Government support is
important to port performance. Government prepares for the logistics development
scheme. Notteboom and Rodrigue (2005) note that port development results from
logistics decisions and the subsequent actions of carriers, shippers and 3PLs. As for
logistics decisions, the government is in the right position for the strategic logistics
scheme. They should put appropriate port governance structures in place to face the
challenges facing port-hinterlands development (Notteboom and Rodrigue 2005).
Preferential government policies will direct port development effectively. In
international logistics, government plays a prominent role in the complex cross-border
environment (Banomyong et al. 2008). Grainger (2007) raises the issue of wasteful
transaction cost due to operations between business companies and government
agencies. To improve port efficiency, the government should offer proactive policies to
address these issues, reduce coordination failures, and build strong domestic
constituencies to support reform. Government should offer preferential policies on
49

customs and border inspection to simplify customs procedures and border inspection
procedures to reduce transaction time and cost for cargo interests.
The free trade zone (FTZ) is one form of regional port development supported by
government. FTZs are specialized areas for international trade, foreign investment,
bonded warehouses, and export processing (UNCTAD 2006). They are considered as
outside customs territory, to attract investment capital such as foreign direct investment
(FDI) and create employment by providing a business friendly environment with
incentives, good infrastructure and other advantages such as tax exemption. Almost all
the key ports worldwide have set up FTZs, such as Klang in Malaysia, Rotterdam in
Netherlands, Antwerp in Belgium, Hongkong in China, Busan in Korea and Singapore.
The preferential policies improve port services in customs clearance, and border cargo
inspection, and benefit shippers with lower cost. FTZs should thus be promoted.
Chinese government support to logistics contributes to port development. Chinas port
facilities have been improved greatly since 1980. Korea is another convincing example
that government support can enhance port performance. According to Yeo et al. (2008),
the government of South Korea helped with the port investment in the early 1990s,
when its maritime industry developed rapidly but its port infrastructure was poor. The
source of South Korea's port construction funding was mainly from government. Private
funds were proactively attracted as well. The government investment was mainly
concentrated on the physical infrastructure such as banks, revetment, dredging works,
bridge, special roads and rails for containers, while dock and terminal construction
mainly depended on private capital. As ports would contribute to the regional economy,
the Korean Government helped to speed up investment in the construction of ports and
port-related infrastructure.
Investment in port development
Government investments in port development include physical infrastructure, port
technical infrastructure and ICT, which are all capital intensive. The investment will
improve the transport quality and port efficiency. The ports ranked at the bottom by LPI
are found to be usually underinvested with poor quality services (Arvis et al. 2010).
Government should help and invest in infrastructure as a public investor. On the one
hand, it can share the risks with port operators; on the other hand, it can reduce the big
financial burden on port authorities and operators. E-government needs to be promoted
to link the different governmental departments such as customs, border agencies, border

50

cargo inspection, tax payment, and financial payment. The ICT system could improve
the port quality service and reduce time and cost by paperless documents.
Apart from the above supports, government should motivate openness to trade and
provide assistance in local marketing and entry strategy alternatives. The banking
policies/regulations for financial support ought to be provided to cargo interests. Port
authorities can play an important role in the creation of core competencies and
economies of scope by active engagement in the development of inland freight
distribution, information systems and intermodality (Grainger 2007).
3.1.2 Transport and communications infrastructure
Since ports have become a prominent node in integrated logistics chains, quick and safe
access to port facilities from an inland transport system becomes a basic factor in
evaluating port performance. The ADB has included infrastructure as a key attribute of
the logistics system, as enlarging the hinterlands has much to do with the landside links
to the hinterlands to enhance the idea of the port belonging to a system (Bichou and
Gray 2005). Notteboom and Rodrigue (2005) also note that inland distribution is
becoming a foremost important dimension of the globalization and maritime
transportation paradigm. Infrastructure investment can have both a direct and a
complementary effect on economic production. It may result in greater travel time
reduction, transportation cost reduction and business expansion encouragement (Talley
1996). For example, the Oresund has improved the infrastructure to merge Copenhagen
Port and Malmo Port to benefit the cooperation between the two cities (Skjott-Larsen et
al. 2003).
Containerization implies that increasing cargoes are from the hinterlands. On the one
hand, this has inevitably increased pressures on port and inland connections to the
hinterlands and other related systems. This has made the inland accessibility and porthinterlands relationships a competitive factor in port improvement (Notteboom and
Rodrigue 2005). The transport infrastructure has thus become more important to match
port regionalization and expansion of port hinterlands. On the other hand, ports need to
be linked to broader hinterlands for more cargo, which has stimulated the emergence of
port regionalization to compete for a stronger hinterlands dimension with a greater
geographical scope. Improving landside infrastructure can not only relieve container
congestion, but also help with port regionalization to reach broader hinterlands.

51

Consequently, inland accessibility has become a cornerstone in port competitiveness

(CEMT 2001).
3.1.3 Cargo interests
Cargo interests refer to consignors and consignees. They need to expand the market and
obtain more trading orders so that more cargoes are available for the logistics movement.
The economic status of the domestic hinterlands will decide whether there is sufficient
cargo or demand to support port development, while the status of the international
economy decides whether foreign countries have a strong demand for the cargo, so
development of both the hinterlands economy and world economy are critical for port
development. They are the actual logistics demand with increasing importance, which
include port city GDP, port hinterlands GDP, hinterlands foreign trade in terms of
volume and value, hinterlands nearness, and port-urban relative concentration index
(Willingale 1981; Peters 1990; AAPA 2009). The demand for cargo volume by cargo
interests will determine the logistics demand, which increases port performance.
3.1.4 Public and private service providers
Public and private service providers that provide port activities constitute another
component of port logistics system as a system player. Services by LSPs include the
services by shipping lines, the port authority, port operators, forwarders, warehousing
operators and government agencies. All the services are related to port efficiency, which
is critical for port performance. The service quality is highly related to their logistics
skills, which are one critical factor to influence the performance of that sector (Gordon
et al., 2005).
This section has explained the components of the logistics system at ports. The next
section will review performance measurement for the logistics system components.
3.2 Measuring port performance
3.2.1 Importance of performance measurement
Ports are dissimilar in many aspects such as assets, roles, functions and institutional
organisation (Bichou and Gray 2005). They are distinguished by the measurement of
performance, which is important, because what gets measured gets done (Drucker
1962) and the world-class behaviours are incentivised by world-class measures
(Frazelle 2002). Key performance indicators (KPIs) are used for evaluating performance
and determining future courses of action (Gunasekaran et al. 2004). The indicators can
52

provide management information for organisations, serving as a means of performance

comparison and communication with relevant stakeholders (De Langen et al. 2007).
Developing port performance indicators (PPIs) can guide resource allocation and
deployment for improving port efficiency.
To ensure that indicators are appropriate, a set of criteria should be met: this should
include both internal and external measures (Bowersox and Closs 1996), both
qualitative and quantitative measures (Hastings 1996), and both financial and nonfinancial measures (Kaplan and Norton 1992; Gunasekaran et al. 2004). Multidimensional performance measures rather than a single dimensional performance
measure (Doyle 1994; Mclntyre et al. 1998; Monaco et al., 2009) should be taken.
Benchmarking is another important criterion (Camp 1989; Hanman 1997).
3.2.2 National and regional logistics key performance indicators
Logistics capabilities vary in different countries. According to China Development and
Reform Commission (www.sdpc.gov.cn), and China Federation of Logistics and
Purchasing, Chinas ratio of logistics cost over national GDP was 21.3% in 2004. In the
same year, the ratios of the developed countries were 11.7% for the US, 10.2% for
Japan, 11.3% for Australia, 9.8% for France, 9.9% for Germany, 9.9% for Canada and
10.4% for the UK.
Country variations in logistics performances stem from different logistics strategies and
attitudes (Long 2003), different quality of logistics services (Hausman et al. 2005),
different geographical locations and government policy (Long 2003), different physical
and institutional infrastructure (Long 2003), and different social, cultural, economic and
political environments (Bichou 2006). The review of factors that cause national logistics
performance difference may build up knowledge of factors that drive different port
performance.
According to Long (2003), US logistics is characterized by innovation and the logistics
focuses on logistics customer orientation. Logistics in Japan highlights practical issues
and focuses on cost control, sea shipment, a perfect physical logistics infrastructure,
operations management skills, automation, service and green logistics. The logistics is
supported by country policy. German logistics turnover accounts for 7% of German
GDP and accounts for 28% of European logistics market share, benefiting from
Germanys geographic location right in the heart of Europe, top infrastructure, logistics
technology and the security and reliability of the German legal system as a conducive
53

environment (Long 2003). The practice in various countries shows that logistics has
played a key but different role in their economic development.
The countries and regions with excellent logistics assets and abilities usually contribute
to their regional prosperity, while those with poor logistics assets and abilities suffer
economically (Long 2003). The author suggests that logistics assessment should include
geography, physical infrastructure and institutional infrastructure. Long (2003) and
Skjott-Larsen et al. (2003) consider geographic features such as ports as natural aids.
Flat land with firm ground provides the best access for land travel, while extreme
mountains and marshes make travel very difficult or impossible. German industry
benefits from the Ruhr Valley and the coastal Chinese areas benefit from natural ports
such as Hongkong, Shenzhen, Ningbo, Shanghai, Qingdao and Dalian.
Long (2003), Skjott-Larsen et al. (2003) and Asian Development Bank (Banomyong
2007) claim that good physical infrastructures of roads, ocean ports, trains or airports
require large investment and take years to build. When the physical parts of the logistics
system are in place, the institutional infrastructure is needed, such as a legal system with
rules of trade and commerce, customs officials, legal enforcement of business contracts,
and banks to provide financing and other services provided by government and other
businesses.
Some other KPIs are often employed in national and regional logistics evaluation.
Logistics cost/GDP is often seen as an important measurement to assess logistics
efficiency. China employs indicators such as trading volume, cargo rail freight volume
per km, road/rail miles for per thousand people, congestion, road/rail/air/pipeline km,
average speed, goods turnover, traffic mileage, goods damage and pilferage rate.
Skjott-Larsen (1999) considers the Oresund region as a successful example of
developing regional logistics, making use of infrastructure, location and skilled
personnel. Regional logistics has enhanced trading. However, some barriers are also
found, such as cultural differences, bridge tolls, difference in legislation and political
factors (Skjott-Larsen et al. 2003).
Banomyong et al. (2008) proposed creation of an ASEAN single market and
strengthening of ASEAN economic integration by liberalization and facilitation
measures in logistics services and support. The competitiveness of ASEAN production
is based on the integrated ASEAN logistics environment. Banomyong proposed the
following major policies and integration roadmap: encouraging the integration of
54

ASEAN national logistics systems and the progressive liberalization of logistics service
providers; increasing trade, logistics and investment facilitation; building ASEAN
logistics capacity; promoting ASEAN logistics service providers and multimodal
transport capacity. These policies are the targeted logistics drivers.
3.2.3 Trading logistics KPIs
Hausman et al. (2005) note the importance and contribution of logistics indicators to
trade: measurable and quantifiable logistics indicators improve the explanatory power of
a gravity model for bilateral trade; efficient logistics in time and cost can contribute to
increased trade; higher variability in processing time can be a deterrent to bilateral trade.
They find logistics performance to be significant in influencing bilateral trade through
the use of measurable and quantifiable logistics indicators.
A World Bank empirical research on trading logistics started in 2000 and was led by
Ojala et al. (2007). Another research by the World Bank was in 2004. Questionnaires
were distributed to 800 logistics professionals worldwide, including the operators or
agents of the worlds largest service providers, multinational logistics carriers and
shipping companies. They gave an in-depth cross-country assessment of the logistics
gap. The World Bank conducts the LPI survey every two years. The World Bank
developed six dimensions for a LPI, which is a set of indicators to evaluate the national
trading logistics, including custom efficiency, infrastructure quality, shipment ease,
logistics competence, tracking capability and shipment frequency (Arvis et al. 2010).
Table 3.1 presents specific examples of their indicators in their LPI surveys. As ports
are part of the trading logistics, LPI is applicable to ports.
Table 3. 1 Indicators Worldwide Bank LPI
Time
Total time for a trade
transaction
Document processing time
Customs clearance
Technical control

Cost
Total cost for a trade
transaction
Port & terminal charges
Document processing
Customs clearance

Vessel waiting time for berth Inland freight

CSI related time
Source: World Bank Global Logistics Indicators Survey

Complexity
Signatures for a trade
Transaction
# of doc. per transaction
% of containers inspected
Level of inspection

Efficiency
No. of containers unloaded
Per berth hour
Port shutdown days
Inland transport speed
Frequency of vessel calls at port

Criteria for inspection

The 2009 ranking results revealed that the top ten countries in global logistics by LPI
are: Germany, Singapore, Sweden, Netherlands, Luxembourg, Switzerland, Japan,
Austria, the UK, Belgium and Norway. Countries with a comprehensive approach
perform well in all the key logistics, while those with a piecemeal approach do not have
lasting improvement in LPI. The Enabling Trade Index gives trade rankings of regions
55

based on their market access, border administration, transport and communications

infrastructure and the business environment (Lawrence et al. 2010).
PPIs are related to national logistics KPIs and they are closely related to trading
logistics LPIs. Thus the KPIs reviewed are applicable to PPIs, which will be reviewed
in the next section.
3.2.4 Port performance indicators
Ports, as part of regional logistics assets, constitute an important link of the logistics
chain. Many great cities are centred on natural ports such as Hongkong, Rotterdam,
Bombay, Dubai, Shanghai and New York. The efficient management of ports is selfevidently important to the port users who care about the efficient flow of ships and
cargoes through the docks, which determines the port prosperity (Robinson 2006).
Improving port performance is beneficial to improve international trade, attract foreign
investment and increase employment. Port performance is important to the hinterlands,
as the hinterlands economy often has increased by the effect of port performance.
Port performance measurement is complicated, as a port is a cluster of economic
activities where a large number of firms provide products and services and together
create different port products (De Langen et al. 2007). Widely accepted performance
measurements are unavailable, although there is a wide range of measures and
indicators for port efficiency and performance, as ports are very dissimilar (Bichou and
Gray 2004). This section reviews the literature and tries to identify PPIs systematically.
Port performance indicators
According to the Oxford English Dictionary, a performance indicator is a variable by
which the success or productivity of a venture, policy, or product can be gauged. This
definition is applied to the current research of PPIs. A number of PPIs are used from
different perspectives. The Belgian annual reports on the social-economic importance of
the Flemish port are measured by value added, employment and investment (Lagneaux
2006). PPIs by the World Bank (Chung 1993) are categorised into operational
performance indicators (labour productivity, channel depth management, berth
utilisation), asset performance (berth throughput, berth occupancy rate, berth utilization
rate) and finance performance [(income/expenditure) per GRT (gross registered ton) or
NRT (net registered ton) of shipping, operating surplus per ton of cargo handled and
rate of return on turnover)]. Besides the indicators of finance and operations aspects, the
Department for Transports (DFT) key PPIs include wider impacts (GVA/NVA,
56

economic impact assessments, social impact, environmental reporting and safety

reporting) to improve port efficiency and accountability (DFT 2009). The AAPA holds
the view that ports can be evaluated by volume and value of trade, number of cruise
passengers, revenues, storage capacity, size of a port, productivity, efficiency, or
responsiveness to customers. AAPA focuses more on trade and offers the annual world
port ranking by volume and TEU.
Apart from the maritime organisations, individual researchers have showed their
constant interest in PPIs. De Langen (2003) proposes PPIs as throughput volume, ship
waiting time, logistics value added and logistics space (m2) and investment level in port
related manufacturing. Bichou and Gray (2004) identify that throughput measures for
internal performance are the second most commonly used (only next to finance
measures) whereas productivity and economic-impact indicators are more prominent for
external comparison with other ports. Robinson (2006) considers minimum elapsed time,
acceptable cost and required quality as the three value variables for delivery to shippers
and stakeholders.
Table 3. 2 Port performance indicators by Wu and Zong (2004)
Level I PPI
Port natural conditions

Level II PPI
Locational environment
Navigation
Coastal line conditions

Port operations conditions

Port capacity
No. of berths

Port performance

Throughput
Hinterland environment

Scope of hinterland
Natural resources
Transport and distribution system
Port city scale
Hinterland

Logistics information system

Information system hardware

Information system software

Policy support

National and local policies

Wu and Zong (2004) evaluate port performance by the approach of Analytical

Hierarchy Process (AHP). They employed 4 level-II indicators and 15 level-III
indicators, shown in Table 3.2. Xiao et al. (2005) and Ren et al. (2007) assess port
performance employing AHP as well, and adopt similar indicators. They identify that
port charges, free trade, customs services, ICT level and other financial or insurance
services, infrastructure and logistics services are more important than geographical
factors and port services quality such as speed and risks.
57

Bichou (2006) notes that most practical and theoretical approaches to port performance
measurement benchmarking are three broad categories: performance metrics and index
methods, economic impact studies and efficiency frontier approaches. He concludes
that performance measures often fall into three categories: input measures (e.g., time,
cost and resource), output measures (e.g., production/throughput, profit) and composite
measures (productivity, efficiency, profitability, utilisation, effectiveness). Port impacts
on the economy are measured to assess the direct, indirect and induced economic and
social impacts on their respective hinterlands or forelands. Port performance is depicted
to generate optimal output and economic wealth. Much empirical research is about port
productivity or production function to compare actual output to optimum output by
employing frontier method, which assesses port efficiency (Clarke and Gourdin 1991;
Bichou 2006).
Carbone and Gouvernal (2007) find that some ports report additional PPIs (Table 3.3).
Table 3. 3 Additional port performance indicators
Port region

PPIs

Year

Vancouver

First of call

2007

Australia

Port dues real price index

2004

Queensland

Market share in State

2004

Long Beach

Value of goods shipped, customs revenues, local and state tax revenue from port

2003

Tacoma

Port related employment; average wage level in port compared to average country level

2004

Valencia

Water quality, regular calls of shipping lines

2002

Stockholm

Investment volume of port authority

2003

Antwerp

Private investment in port; EDI use of port traffic management

2003

De Langen et al. (2007) claim that specific PPIs rather than common PPIs should be
applied to different types of ports. Moreover, they propose new PPIs instead of the
traditional ones. For example, they suggest ship turnaround time and connectivity index
should replace ship-waiting time for cargo transfer ports; throughput volume per m2
should replace throughput volume as new PPIs, although ports do not report them
systematically and structurally as they should. For logistics product, percentage of
goods to which value is added in the port area is a relevant output indicator, which
shows a logistics location. For port manufacturing product, the most relevant output
indicator is the investment level in manufacturing facilities, which shows whether the
investment is increasing or decreasing. Productivity of the industries and wage level are
the two upgrade indicators.
Pettit and Beresford (2008) note that volume of trade, total value of commodity
throughput and port-related employment are all possible indicators to assess port
performance. However, they realize that the indicators are difficult to quantify. Ducruet
58

et al. (2008) suggest that PPIs are throughput, value added, employment, intermodalism,
attraction for firms and some other indicators.
As the various PPIs are too many to control, it is helpful to categorise the indicators, as
addressed in the next section and shown in Figure 3.1.
Time:
Ship turnaround time
Total time for a trade transaction
Document processing time
Labour idle time
Truck queuing time at port gates
Time for customs clearance

Output:
Throughput volume
Container TEUs/ increase rate
Total cargo value
# of tug/pilotage jobs/y
Employment

Cost:
Total cost for a trade transaction
Port/terminal charges per/t
Port charge for ships
Shipping prices
Infrastructure:
Depth of navigation and berth
No. of berths
Wharf/quay length
Terminal/berth accessibility

Seaside connections:
LSCI (UNCTAD):
# of direct call
# of ships
Feeder operations
Frequency of vessel call

Risk:
Cargo damage probability
Cargo loss probability
Port congestion
Risks
Stability of port labour

Superstructure:
Yard
area of storage
Loading/unloading facilities
Equipment
Yard cranes (No. and types)
Port performance
indicators

Skills:
Skills of operators
Management level
Warehousing mgt
Labour productivity
Cargo handled per man-shift
Average wage levels
Efficiency:
Productivity
Labour efficiency
# of containers move/h
Tonnage handled/d
Labour
efficiency:
MT/person/year
Loading/unloading rate
Port/berth utilization rate

Information system:
Inf. exchange with customers
Inf. exchange with intermodal org.
Inf. share with other service org.

Reliability:
Port channel reliability index
Entrance/dept gate reliability
Stability of port operation
Carrier schedule reliability

Service:
Responsiveness to customers
Flexibility
Complexity for doc. Signature
Level of inspection

Finance:
Profitability
Value added
Return on turnover
ROCE
Wage comparator
Tax revenue/ customs revenue

Figure 3. 1 Categories of port performance indicators

Categories of PPIs
Output
The major measures of economic impact of ports are output, household income and
employment, according to Antioch (2000). Cargo output measures the port activities,
such as output per worker, output per terminal/wharf or cargo handling productivity. A
ports economic optimum throughput satisfies an economic objective of the port (Talley
2006). The port economic performance may be evaluated from the standpoint of
technical efficiency, cost efficiency and effectiveness.

59

Throughput of goods shipping tonnage is often used as an indicator of port development

(WorldBank 1991; Tongzon 1995; UNCTAD 2002; De Langen 2003; Slack 2007;
Bichou 2006; Talley 2006; Wu 2008; Xiao et al. 2008; DFT), while TEU, a standard
linear measurement used in quantifying container traffic flows) is often used to measure
the container throughput (AAPA; DFT). Throughput is the most widely used by ports
for comparison. Tonnage handled per ship day is a primary measure for vessel
performance (Chung 1993). Talley (2006) considers that if a ports actual throughput
approaches (departs from) its optimum throughput over time, its performance has
improved (deteriorated) over time. He notes that cargo tonnage handled, truck queuing
time at port gates and facility utilization are port-authority indicators which may be both
efficiency and effectiveness indicators to reflect port utilization and throughput.
Besides cargo tonnage and TEU, throughput includes value of goods shipped, total
retail sales of consumer goods, number of cruise passengers, number of tug jobs per
year, number of pilotage jobs per year, number of loadings and unloading and
departures, employment, berth throughput, throughput per linear meter of wharf. The
throughput is provided by most port authorities and usually comparable, but it is
difficult to compare different cargo traffics and lack of precision of traffic totals
(UNCTAD 1976; Tongzon 1995; Slack 2005). Income and employment are also often
treated as output indicators (WorldBank 1991; Stopford, 1997; Trujillo and Nombela
1999; UNCTAD 2000; De Langen 2003; Talley 2006; Ducruet 2007).
Time
Time includes ship turnaround time, ship waiting for berth time, cargo dwell time,
labour idle time, time between cargo unloading and ship leaving, truck queuing times at
port gates, waiting to service vessel time ratio, total time for a trade transaction,
document processing time, time for customs clearance, vessel/working time at berth,
minimum elapsed time, turnaround times for processing information and documents
about ship arrivals, loading and unloading and departures (WorldBank 1991; Chung
1993; Nombela 1999; De Langen 2003; Gordon et al. 2005; Trujillo and Talley 2006;
Bichou 2006; Robinson 2006; Arvis et al. 2010). The time indicators show how
efficiently or inefficiently the ports serve the customers of carriers, shippers, consignees
and PSPs.
The ship turnaround time refers to the time between ship arrival and ship departure. It
has not been systematically reported, although it has long existed in the literature (De
Langen et al. 2007). The World Bank claims that the vessel turn-around time is a
60

primary measure of vessel performance (Chung 1993), which is broken into average
vessel time at berth, average waiting (idle) time, tons per gang hour, TEUs per
crane/hook hour, and dwell time.
Cost
Price is always an important factor for customers to consider when they decide to
choose which product or service to buy. Similarly, as businesses are profit oriented,
when port customers decide at which port to call, they will compare the port cost, which
includes charge for carriers and charge for shippers by port authority or port operators.
Ports, as practical business entities, undoubtedly seek profitability. To maximize profit,
the ports need to minimize cost. The indicators on cost are unexceptionally treated as
important indicators. Cost has rich components in the literature, see Table 3.4.
Table 3. 4 Cost components
Component

References

total cost for a trade transaction

Bichou and Gray 2004; Bichou 2006; Robinson 2006; Arvis et al. 2010

port & terminal charges per throughput ton

Brooks 1985; Talley 1996; Gordon et al. 2005; Arvis et al. 2010

port charge and port dues of ship

UNESC AP 2005; Talley 2006; Arvis et al. 2010

the charge per TEU

Trujillo and Nombela 1999

document processing cost

Arvis et al. 2010

customs cost

Tongzon 2007

expenditure

Word Bank

inland freight

Arvis et al. 2010

port tariffs

Willingale 1981; Slack 1985; UNCTAD 1992

freight rate

Tongzon 2007

total logistics cost

Notteboom and Rodrigue 2005

pilotage fees, storage cost, rental of port

property and land

Brooks 1984; 1985; World Bank 1993; Talley 1996; Trujillo and Nombela 1999;
Gordon et al. 2005; UNCTAD 2006; Bichou 2006; Robinson 2006; Talley 2006;
Arvis et al. 2010

Both carriers and shippers think that port charges account for a significant part of their
total transportation costs. Gordon et al. (2005) find that the port charges of Singapore
account for about 20% of freight charges. As shippers are facing fierce competition in
the shipping market and trade market respectively, they have to minimize their total
transportation cost to gain competitive advantages. They prefer ports that offer
relatively lower service charges. A port with a lower charge is more competitive than its
rivals, holding other factors constant. Apart from port charges, the other costs are also
important factors to consider as they constitute the total logistics cost from suppliers to
customers.
A cost trade-off analysis between functions, processes and even supply chains is often
adopted to measure the performance in business logistics and supply chain, and this

61

approach is beneficial to port efficiency (Bichou and Gray 2004). Ports compete for
customers such as carriers and freight forwarders, focusing on cost and price.
Seaside connections
Seaside connections include a variety of shipping routes and options, frequency of
vessel calls, ship direct calling, number of ships, feeder operations, container transport
routes, and port connectivity worldwide (Brooks 1985; Slack 1985; Joly 1999; Gordon
et al. 2005; Arvis et al. 2010; Carbone and Gouvernal 2007). The indicators show how
ports are linked with other deep-seaports and feeder ports. They indicate where the
customers are, and how often they need the cargoes to come and go.
UNCTAD generated the Liner Shipping Connectivity Index (LSCI) by country in 2004,
including the number of ships, TEU carrying capacity, the number of services, the
number of shipping companies and the maximum vessel size. The LSCI index is
proposed to quantify how well a port is connected to overseas and domestic destinations,
measuring both overseas accessibility and hinterlands accessibility. Figure 3.2 presents
the trends of LSCI from 2004 to 2009.

Figure 3. 2 Trends in connectivity indicators-Index of country

Source: UNCTAD, based on data from Containerisation International Online

The indexes are calculated based on the quality of connections to other ports and
intermodal terminals in the hinterlands. In 2009, China continued to have the highest
LSCI, followed by Hongkong, Singapore, the Netherlands, Korea and the UK.
Developing countries are found to have significantly improved their LSCI ranking since
2004 (www.UNCTAD.org).
62

Landside connections
Bichou and Gray (2004) note that recent port measures not only focus on seaside
performance but also landside efficiency, including intermodalism, transport efficiency,
availability and efficiency of transportation, inland transport speed, and highways and
railways in miles in port hinterlands (Slack 1985; MaCalla, 1994; Joly and Martell,
2003; Bichou and Gray 2004; Arvis et al. 2010). These indicators show how well the
port is linked with the hinterlands by rail, road, air, waterway, pipeline or intermodalism.
Infrastructure
Most ports regard accessibility as an important marketing element (Pettit and Beresford
2008). Trujillo and Nombela (1999) distinguish port superstructure (buildings and
equipment on ports) from port physical infrastructures (subordinate parts and a
foundation of a port) and information system.
Port physical infrastructure refers to the length of bound lines, navigation distance
(Willingale 1981), water channel and channel/berth depth (DFT 2009), ground slots
(Gordon et al., 2005), wharf/berth/draft/terminals number, length and depth (UNCTAD
2006; Gordon et al. 2005; Wu 2008), terminal/berth accessibility, area and size of
storage, and locks (AAPA; Talley 1996; Wu 2008). Port infrastructures offer the
natural conditions for ship calling. Increasing international trade and economies of scale
have driven the emergence of increased scale of vessel size. The large vessels need
deeper channels and more dredging work to allow their calling.
Port superstructures include loading and unloading facilities, equipment of quay cranes,
yard cranes (number and types) and warehousing facilities (Murphy et al. 1988; 1989;
1991; 1992; Gordon et al. 2005; Wu 2008; World Bank). The superstructures offer the
physical conditions and port facilities for port operations efficiency. Talley (2006) notes
that the equipment perspective indicators are cargo handling rate, number of ships and
amount of cargo handled, containers handled per crane and cargo handled per man-shift.
Port information system includes the port ICT system, information interchange with
customs and between the intermodal (UNCTAD 2006). The relevant indicators reflect
the quality of the information system, which is composed of networks and systems
between different components of port systems and relevant government department.
Finance
Many ports treat financial indicator as the most important indicator of port performance.
Finance indicators include value added, profit, revenues, customs revenues, local and
63

state tax revenue, return on capital employed, return on turnover, weighted average cost
of capital, gearing, capital required to load/unload from a ship, wage comparator (De
Langen 2003; Bichou 2006; Carbone and Gouvernal 2007; Ducruet et al. 2008; AAPA;
DFT; World Bank). Value-added indicators refer to expenses on labour, depreciation
and profit, which reflect the value of changes passing through the port, but they are
difficult to measure and compare because of the diversity of the activities involved (e.g.
cargo reprocessing, packing, repacking, labelling and inspection) (De Langen 2003;
Ducruet et al. 2008).
Bichou and Gray (2004) find that financial measures are the most commonly used
indicators of port performance. Deng et al. (2008b) note that service quality and
customer satisfaction are principal drivers of financial performance. Therefore, it is
critical for a port to improve customer satisfaction in todays competitive global
marketplace, as customer satisfaction increases customer loyalty (Matzler et al. 2004).
Port managers should thus increasingly focus on evaluating customer satisfaction with
port services and identifying critical service performance factors.
Efficiency
Efficiency is a critical indicator for port services. Good performance in efficiency will
attract more customers. Table 3.5 presents its detailed indicators.
Table 3. 5 Efficiency indicators of port performance
Efficiency component

References

Custom efficiency

Arvis et al. 2007; Chiu (1996); Bichou (2006)

Labour efficiency: No. of containers unloaded per berth hour

Talley 1996; Arvis et al. 2007

Number of containers move per hour

Gordon et al (2005)

Tonnage handled per ship day

World Bank

Labour efficiency: handle MT/person .year

Chinese

Port operations efficiency

Chinese; World Bank

Ship loading/unloading service rate (for a given type of cargo)

Talley (1996)

Loading/unloading service rate for port vehicles of inland carriers

Talley (1996)

Containers handled per crane

Talley (1996)

Pick up and delivery service

UNCTAD

Responsiveness to customers

AAPA2005

Flexibility

Gordon et al (2005)
DFT; Talley 1996; Bichou 2006; Trujillo and Nombela
(1999); World Bank

Port utilization (berth, facilities, etc.)

Trujillo and Nombela (1999) proposed three broad categories to measure port efficiency:
physical indicators, factor productivity indicators and economic and financial indicators.
Physical indicators generally refer to time measures. Factor productivity indicators
focus on the maritime side of the port, measuring both labour and capital required to
load or unload cargoes from a ship. Economic and financial indicators are usually
related to sea access, e.g. operating surplus or total income and expenditure related to
64

GRT or NRT, or charge per TEU. Port impacts on the economy are sometimes
measured to assess the economic and social impacts of a seaport on its respective
hinterlands or foreland.
Services
The port service indicators include responsiveness to customers, flexibility, complexity
for documents (signatures for a trade transaction, number of documents per transaction,
percentage of containers inspected, level of inspection and criteria for inspection) (Arvis
et al. 2007; 2010) and reliability (port channel reliability, port berth reliability, entrance
gate reliability and departure gate reliability) (Talley 2006; Tongzon 2007). Efficiency
of customs clearance has become a key factor in the port to attract shippers. Port
customers want simplification of signatures, inspection and documents. They also like
to choose a port based on whether the port service is reliable and quickly responsive.
Singapore has achieved the advanced paperless customs clearance, which has greatly
improved the customs efficiency (Tongzon 2007).
Other service indicators include confidence in port schedules, port availability and
accessibility, port shutdown day, port service capacity, port reputation and loyalty,
assistance in claims, quality of jobs, labour and capital required to load or unload from a
ship, processing capability, distribution capability, tracking capability, logistics
competence, effectiveness, customized service, technical control, ship maintenance and
supplies (Brooks 1985; Slack 1985; Murphy 1992; UNCTAD 1992; Talley 1996;
Trujillo and Nombela 1999; Bichou and Gray 2004; UNCTAD 2006; Bichou 2006;
Robinson 2006; Wu 2008; Arvis et al. 2010; DFT 2009).
Risk
Risks include ship/cargo damage probability, risks, port congestion, percentage of
congestion, cargo loss/damage probability, safety, and probability of damage/loss to
inland-carrier vehicles (Brooks 1984; Brooks 1985; Slack 1985; Murphy et al. 1989;
Murphy et al. 1991; Murphy et al. 1992; Talley 2006). The indicators for ship risks
include average delay to ships waiting for berths and average delay to ships while
alongside berths (Talley 2006). Port risk and safety are closely related and important for
port management. Unsafe is part of port risks. Such unpredictable factors as strikes,
equipment breakdown and weather make carriers and shippers suffer loss. If such
occurrences are frequent, the carriers and shippers will leave for other ports.

65

Human resources
Human resources include skills of port operators, stability of port labour, management
level such as warehousing management and port management, labour productivity,
cargo handled per man-shift, average age of employment at port, and average wage
level in port related industries compared to the average of other countries (Clarke and
Gourdin 1991; Trujillo and Nombela 1999; Bichou and Gray 2004; Gordon et al. 2005;
Carbone and Gouvernal 2007; Wu 2008). Talley (2006) notes that the labour
perspective indicators include number of employees, average age of labour force,
average hours worked per week by employees and labour idle time. Human resources
are critical, as all operations and management need personnel to make them happen.
Skjott-Larsen et al. (2003) find that easy access to qualified people is one of the most
important drivers that developed the Oresund regional logistics. Gordon et al. (2005)
identify that well-educated and hard working labour force is one attribute of Singapores
good port performance. The capability of human resources and logistics skills determine
operations efficiency to some extent.
Potential development
Port investment, cost of infrastructure, investment volume of port authority, private
investments in port, development in turnover, increase in port city GDP, volume growth
rate, international trade increase rate and container increase rate are indicators that
evaluate a ports potential development (Gordon et al. 2005; Carbone and Gouvernal
2007).
Apart from the indicators reviewed above, there are plenty of other indicators, such as
change of social environment, international politics, regulations, such as environmental
issues, geographical location, image marketing and communications, water quality in
the ports, and market share in the State (Peters 1990; Guy and Urli 2006; Carbone and
Gouvernal 2007; Comtois and Dong 2007).
Problems with some key port performance indicators
As there are many activities and participants involved in the complex port environment,
it is not appropriate to evaluate port performance with a limited number of indicators, as
each indicator has its own constraints, and PPIs are not fully satisfactory (Carbone and
Gouvernal 2007).
De Langen (2003; 2007) criticized a few important indicators: ship turnaround time,
berth occupancy rate, throughput, and employment. He explained that: 1. Ship
66

turnaround time can be used to evaluate the ship efficiency, but it is influenced by the
cargo volume, port facility availability and cargo composition. This idea is consistent
with Trujillo and Nombela (1999) and the World Bank (1991); 2. The berth utilization
rate seems more useful than the berth occupancy rate, but it also varies according to the
type of cargo handled (general cargo, container, bulk); 3. The throughput relates to
cargo handling but does not reflect productivity; 4. Average profitability is a
problematic indicator, as clustering does not necessarily lead to higher profits of firms
in a cluster. Moreover, high profitability of firms in the cluster could indicate a lack of
internal competition; 5. Productivity is not a good indicator, as it is a partial measure
and does not consider decline or increase in the number of firms in the industry.
Employment is a direct indicator of port economic impact on the local/regional areas,
but it is difficult to assess the effective linkages between port activities and various
industries (Stopford 1997; De Langen 2004). Ducruet et al. (2008) challenge the
indicator number of employees as one PPI. The number of employees does not
explain the role of ports in advanced economies (Haynes et al. 1997). In the context of
increasing containerization and mechanization, ports no longer generate employment as
much as they used to. Therefore employment may be inversely related to productivity
and not future oriented. Income/expenditure is a very common denominator for
comparison, yet it is very difficult to obtain accurate figures.
Ducruet et al. (2008) argue that the quality of jobs in terms of average wage level is a
better indicator to assess the role of ports in realizing economic wealth. Their arguments
are supported by economists who assume labour markets should work relatively
efficiently. This is also identical with Porters (2003) view of wage levels as the main
indicator to assess regional performance for all industries. Porter (2003) claims that
wage levels indicate the wealth of a given area and reflect the education level, skills and
knowledge, which are regarded as human capital that fosters regional economic growth
and ports economic and social environments (Howells, 2005; Ducruet et al. 2008). It is
a preferred indicator as it varies with the nature of jobs and therefore indicates the
wealth of a given area (Blanchard 2000). However, due to ethical issues and
confidentiality, the indicator is not easily accessed.
Some indicators are very difficult to obtain in order to assess port performance. Firstly,
there are different terminals in a port area with different performance. Secondly, the
port authority may not disclose the data, especially financial or efficiency indicators.

67

Brooks and Pallis (2008) further note that a number of ports do not undertake
comprehensive performance measurement due to the complexity of port activities.
It is also noted that PPIs change as time passes on. For example, De Langen et al. (2007)
reviewed the different PPIs in Rotterdam from the beginning of the 20th century to
2004. The indicators at the beginning of the 20th century were number of ships and
throughput volume. In 1990s, port related employment, value added, and port value
added as a percentage of regional GDP were introduced. In 2002, development in
turnover and profitability of firms in port were introduced. Investment level of private
firms in a port area and establishment of new companies in port area were introduced in
2003 and 2004.
It is hard to distinguish the determinants and the indicators of port performance. For
example, productivity is a determinant of port operation efficiency, while productivity is
measured by speed of cargo handling and the vessel turnaround time; the indicator of
time is regarded as a determinant of cargo handling speed; cost is an important indicator
in logistics, meanwhile it is a determinant of operational efficiency. This is why this
research employs PPIs as foundations of determinants of port performance.
3.3 Factors contributing to success of ports
Logistics is a network system composed of many echelons and routes. Historically and
currently, there have appeared some successful ports in the port logistics system. This
section reviews factors causing their success.
Historically, the history of Italy, Portugal, the Netherlands and the UK in port
development as sea powers benefited from a number of factors. According to Yue and
Zhang (2006) and Hong (2007), the ports share the following common features. Firstly,
the ports enjoyed a favourable geographical location. Secondly, the ports were wellknown for skills in seamanship and rich navigation knowledge. This further promoted
the development of relevant sectors such as shipbuilding, construction, manufacturing
and navigation. Thirdly, except for Portugal, they developed hinterlands well. Fourthly,
when these nations explored shipping routes, their overseas colonies expanded and they
controlled the sea channels for trade. The activities and development of the port relevant
sectors promoted trade, local and regional economy. Finally, the ports received
institutional support from government on foreign trade.

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Currently, as addressed earlier, different ports have different performance. According to

AAPA, Rotterdam, Hongkong, Singapore and Shanghai are top ports in port throughput,
by cargo volume and by container TEUs. Table 3.6 presents their background.
Table 3. 6 Background of some ports with good performance

Rotterdam
Hongkong
Singapore

Shanghai

Throughput
(AAPA, 2009)

Output/GDP

386,957,000mt
9,743,290Teu
242,967,000mt
21,040,096Teu
472,300,000mt
25,866,600Teu

10%
www.yicang.com
5.2%

505,715,000mt
25,002,000Teu

NA

9.4%

# of carriers
# of ports
connected
500
1,000
500

Employmt

200
130
(countries)
200
300

8,000

6%

NA

*12% of China
total containers

70.000
(2007)
204,000

% of emp. Over
national
population
1.4%
6%

Source

National Bureau of Statistics

of China in 2005;
http://www.mardep.gov.hk
Logistics
Development
Research Report of 2008;
Gordon et al. 2005
www.stats-sh.gov.cn

Logistics is one of Hongkongs four pillar industries (finance service, tourism, trade and
logistics, discipline professional service and other supporting services). Singapores 200
different shipping lines sail daily to every major port worldwide (Tongzon and Heng
2005). Shanghai accounted for 12% of total China freight (Comtois and Dong 2007).
Some common factors leading to favourable port performance are concluded as follows.
3.3.1 Unique geographical conditions
Rotterdam, located in the South of the Netherlands on the North Sea, is the biggest
seaport city in Europe. Rotterdam is directly situated on the estuary of the rivers Rhine
and Maas. The strategic location has made Rotterdam a gateway to the densely
populated European market. Being the third busiest port after Singapore and Shanghai
worldwide, Rotterdam is well-known as the trade and transport centre of Netherlands
and by far the busiest port in Europe. With natural deep water (24 metres, 75 feet) and
no locks, the port can serve very large ocean-going vessels unrestrictedly for 24 hours a
day, 7 days a week (www.portofrotterdam.com).
Hongkong, an island sitting just south of Guangdong Province, with the South China
Sea surrounding its southern coast, enjoys the reputation of Chinas south door.
Covering an area of 1,100km2 with over 6.8million population, it is in the central region
of rapidly developing Southeast Asia. With wide harbours protected by mountains, the
region is favourable for transhipment. Its geographical location between the Taiwan
Straits, the South China Sea, and the Pacific Ocean makes it a strategic port for sea
transport connection worldwide (Peng et al. 1999).
Singapore is located at the entrance and exit of the Malacca Strait, the worlds major
shipping routes linking the Indian Ocean and the Pacific Ocean. Being one of the
69

worlds maritime crossroads, Singapore has developed its logistics sector and become a
key global transhipment hub for goods moving between the East and the West with its
geographical advantage (Souza et al. 2003). Singapore is a natural logistics hub,
benefiting from its strategic position in the Asia Pacific, excellent infrastructure, and
various goods and services tax (GST) relief schemes (Eng and Keong 2005). The World
Economic Forum, in its Global Enabling Trade Report 2008, ranked Hong Kong and
Singapore as the top two ports.
Shanghai is located at the edge of YRD mid-way along Chinas east coast, facing the
East China Sea. The west-east Yangtze River and the north-south coastline form a Tshaped waterway and Shanghai is right at the centre of this waterway system. This
makes Shanghai an important transhipment port for Chinas participation in world trade.
Depending on Shanghai city, backed up with YRD, Shanghai ports handle around 20%
of Chinas trading (Xu 2009).
The strategic locations of these ports enable them to get easy access to rich cargoes and
international shipping lines, which have a positive influence on their port performance.
Ports strategically located close to the main global trade networks with good landside
connections increasingly offer carriers and shippers a more appropriate option (Fleming
and Baird 1999).
3.3.2 Landside connectivity linking hinterlands
Rotterdam has well-connected regional, national and international transport systems by
extremely high quality multi-modes. The physical infrastructure links the port,
hinterlands and foreland by road, rail, air, waterways, pipe and sea, providing excellent
logistics services. Rotterdam sets a good example of intermodal transport, which is an
important strategy for different facility operators, logistics company and service
providers.
High-density rail transport network and fast highways link Rotterdam to the heart of
Europe. The corridor project between Rotterdam and Germany, the freight-only rail, is
one of the priority transport projects of the EU. Eleven railway stations within the
Rotterdam boundaries and a light rail system (Randstad Rail) link Rotterdam with other
cities. It is known that one in three trucks running on European motorways is Dutch
(Analytiqa 2009). Several international connections for Rotterdams road system can
take cargoes to inland Germany, Belgium, France or Great Britain the same afternoon.
The efficient road transport provides door-to-door services and the network of waterway
70

and the spread of the air, oil and gas pipeline are easily accessible. One reason for
Rotterdams success is that Rotterdam provides all imaginable facilities for cargo
handling, distribution, industry and many auxiliary services (Yue and Zhang 2006).
Hongkong's economic and social prosperity is underpinned by a well-developed
infrastructure that includes transport, telecommunications infrastructures and public
utilities, which ensure cargoes to be transported to the final destination rapidly. The
transport network such as railway, road, cargo dock, inland water dock and across
border transport provides perfect physical infrastructure. The infrastructure can not only
reinforce Hongkongs logistics but also contribute to its trade and economy.
Singapores target is to become a comprehensive logistics hub that integrates services
by sea, road, air and distribution. Singapore started the physical infrastructure scheme in
the 1990s and improved its infrastructure later on. Singapores airport has been
regularly rated as the Worlds Most Popular Airport and the Best Airport in AsianPacific for many years. Its transport systems use a very effective IC (Identification Card)
card for charge to link all the transport data and the central data controlling centre (Yue
and Zhang 2006).
Shanghai has favourable landside connections between ports and other important cities
in the upper/middle reach of the Yangtze River, by railways or waterways. The
connections have improved Shanghais transport and distribution system, going further
to the inland river logistics network. Connections have linked Shanghai with cities all
over China (Yang 2008).
3.3.3 Port technical infrastructures
Rotterdam, Hongkong, Singapore and Shanghai all have many specialized and multipurpose port facilities, advanced cargo-handling, storage, distribution, transportation
equipment with high degree of automation and mechanization and first class transport
facilities and transport networks.
3.3.4 Efficient port services
Rotterdam functions as a hub of international goods flows, storage and distribution as
well as an industrial complex. It has sufficient deep-sea and feeder services. The Delta
Terminal particularly is one of the most advanced terminal operations worldwide with
full automation. Rotterdam integrates all kinds of information networks for easy and
efficient service for customers, including the application of global positioning satellite
71

(GPS) in the parking areas (www.portofrotterdam.com). Rotterdam implements a

system of "bonded warehouses" where shippers can handle cargoes free of tax.
Hongkong is well-known for its port services, with high speed of cargo handling,
transparent customs, efficient and simple documentation. Hongkongs financial
regulations and transparent information service have enabled it to have a globallyrecognised highly efficient financial platform. It has become part of a tripartite
confederation worldwide together with London and New York (Bing 2007). Hongkong
boasts of its services in container liners registration, finance, insurance, broker, ship
inspection and maintenance. Hongkong has absorbed the cultures of both east and west
and integrated the advantages of ancient China and foreign countries. It is open to
attract worldwide expertise. Hongkongs success in seaport business relies on talented
people who have basic essential international knowledge (Zhuang and Wang 2005).
Singapore benefits from its efficient logistics service in container stacking and cargo
distribution. To satisfy the relevant logistics companies, Singapore has set up four
distribution centres near the ports with a total area of over 500,000m2 (Gordon et al.
2005). New technology is highly promoted to improve productivity. Shanghai provides
services that are more efficient to the port customers than other ports in China, with
faster port operations, quicker customs clearance and fewer formalities to reduce
logistics complexity.
3.3.5 Logistics demand in the hinterlands
The key to port performance is whether the port can become an important echelon of the
integrated logistics chain and win more cargo sources. Yeo et al. (2008) find that
hinterland condition, which decides logistics demand, is important for port
competitiveness. Wiegmans et al. (2008) consider large hinterland as one of the three
most important criteria for port choice.
Rotterdams hinterlands are Europe, which is a broad economic hinterland providing a
great space for developing Rotterdams industry and logistics. Rotterdams Port
Authority has been trying to strategically invest in the sea transport, barge and rail to
form a logistics chain together with the hinterland industry in order to consolidate the
position of Rotterdam as a world port leader, to promote more effective hinterlands
transport and to enhance port competitiveness (Zhuang and Wang 2005).
Hongkongs main hinterland is PRD, which is rich in all sorts of products. Seventy
percent of the exports and transhipment cargoes in Hongkong are from PRD, which has
72

great influence on Hongkongs logistics and economic development. Hongkong has

been known as the front shops and PRD as the back factories since the 1970s. The
rapid development of PRD has sufficiently ensured the development of Hongkong as an
international shipping and trade centre. Hongkong's excellent transportation facilities
and the PRD's high productivity enabled Hongkong to develop into a logistics hub to
link mainland China with the world. Southern China has been developing with
Hongkong acting as the dragon head, Shenzhen as the deep-sea route port, Guangzhou
and PRD river ports as the feeder ports (Wang 2004).
Shanghai includes over 20 provinces and regions of the whole Yangtze River area as its
hinterlands, both a strong direct hinterland near Shanghai and a vast indirect hinterland
of the middle and upper reaches of the Yangtze River. This drives the growth of
Shanghai ports, which are the most dynamic economic regions in China. These regions
have great potential to feed containers to the port of Shanghai and transhipment to
international destinations. Through the T-shaped waterway system, the direct and
indirect hinterlands of Shanghai ports may cover the regions of the Yangtze River Delta
(YRD), the middle and upper reaches of the Yangtze River, and the eastern coastal
regions.
The YRD covers Shanghai and 15 other municipalities in the neighbouring Jiangsu
province and Zhejiang province. According to the China National Bureau of Statistics,
with less than 6% of the population of China, this region produces about 20% of
Chinas GDP, 30% of its foreign trade and attracts about 50% of FDI in China.
Shanghai has manufacturing industry clusters whereas Jiangsu Province and Zhejiang
Province concentrate on light industry. This economic structure has created a large
demand for energy and natural resources, which have to be imported from international
markets or other parts of China. The raw material imports and large volume of foreign
trade require ever-increasing capacity in the gateway port of Shanghai. Actually, the
port of Shanghai handles not only the freight of 99% of foreign trade generated in
Shanghai, but also 60% of the foreign trade in Zhejiang and 40% of the foreign trade in
Jiangsu province (Sun and Zhao 2006).
The middle reaches of the Yangtze River, with Wuhan as the main gateway port, are
rich in natural resources, especially minerals and ores. Exports from this region are
mainly mineral, chemical, agricultural, iron and steel products. 30-60% of the
containers generated from this region are transhipped through Shanghai. The upper
reaches of the Yangtze River include Sichuan and Chongqing, whose main products are
73

automobiles, motorcycles, chemical products and food products. Chongqing is the

regional gateway port and 30% of this regions containers are exported via Shanghai.
3.3.6 Government support
A port is a system with huge investment. It cannot be available without far-sighted
government planning and legislation as well as huge investment in infrastructure.
Government support is important in influencing port performance in the form of
preferential policies on land use rights, tax concessions, investment and other support.
"Rotterdam Municipal Port Authority" manages the port on behalf of the municipal
government. It is responsible for infrastructure and waterway development, construction
and maintenance to promote the port development. The customs officials work with
clients to expedite the customs clearance process. Due to limited land access to the
terminal, the government has managed to shift the access modes to more rail and barge.
Moreover, the government offers flexible labour market legislation, beneficial tax
regulations for highly skilled workers, and straightforward visa requirements to attract
overseas experts and qualified companies.
Hongkong government is well known for its structure simplification, high efficiency,
high transparency and fairness, with perfect legislative regulations and low/free tax,
which promotes international and regional logistics business for Hongkong. The
government provides transparent information, stable politics, and good bank and
financial facilities that are key factors for investors to consider when they make
decisions on investment. Most investors are satisfied with the way the Hongkong
government is addressing development of its logistics business seriously (Wang 2004).
The Singapore government has vigorously promoted the development of port
performance. It has made efforts on infrastructure, capital injection and technological
development. Singapore Logistics Association has developed a series of Singapore
Logistics Upgrading Schemes to enable the one-stop service for transport, warehousing
and distribution. They provide preferential policy on tax by introducing various
schemes to suspend the tax payable on import cargoes. The FTZs are reflections of
government support for port development. The government provides efficient customs
procedures to attract transhipment via Singapore (Zhuang and Wang 2005).
To improve the efficiency of the relevant government departments, Singapore has
promoted e-government. The public e-corridor is available to promote the industry's
low-cost EDI. The multiple nodes involved in logistics have realised paperless and
74

automatic operations to save the human and financial resources for business and to
improve the operations efficiency. The Singapore government provides service
networks such as Trade net, Port Net and Marinet, which are all supported by ICT for egovernment (Wang 2004).
The Shanghai government has taken a proactive role in port development at great
expense. The government has invested hugely in port infrastructure, such as deep-water
terminals and container terminal construction at Yangshan port, integrating the EDI
platform and simplifying customs so that port services can be improved. The
Waigaoqiao Logistics Park has been accelerated to develop value added services.
Section summary
Historical ports in Italy, Portugal, the Netherlands and the UK and current ports such as
Hongkong, Rotterdam, Singapore and Shanghai have been recognised as successful
ports in terms of cargo volume and container TEUs. Their logistics strategies on
international trade with the support of government have attracted a huge volume of
logistics cargoes. The port infrastructure investment ensures their efficient port facilities
to provide efficient port services. Quality port connectivity attracts logistics demand
from broader hinterlands. The deep-water harbours enable large vessels to call, and the
technology functions as a stimulus for port performance improvement in ICT. The four
ports success is attributable to their geographical conditions (locations and water depth),
port connectivity, quality port services, government support, good port facilities and
sufficient logistics demand from the hinterlands.
3.4 Criteria for port competitiveness and port choice
The impacts of globalisation, deregulation and privatisation have enhanced port
competition. Benito et al. (2003) note that strong competition probably plays an
important role to enable the maritime sector to grow fast. As Porter (1990) states,
competitive advantages are created in the interplay between the rivalry, demanding
customers, and the quality of related and supporting sectors.
It has long been recognised that port competition is not just between ports and transport
carriers but also between the total logistics chains (Fleming and Baird 1999). The
analysis of port competitiveness has mainly focused on port selection criteria. Yeo et al.
(2008) reviewed the components of port competitiveness in the 1980s and 1990s,
covering Europe, America and South-east Asia. In the 2000s, additional criteria were

75

added to their review. The criteria are considered as competitive components, a

summary of which is presented in Table 3.7.
Table 3. 7 Components of port competitiveness (adapted from Yeo et al. 2008)
Author (year)

Components identified

Pearson (1980)

Confidence in port schedules, frequency of calling vessels, variety of shipping routes, accessibility of port

Willingale (1981)

Navigation distance, hinterland nearness, connectivity to ports, port facilities, availability of port, port
tariffs

Collison (1984)

Average waiting time in port, confidence in port schedules, port service capacity

Slack (1985)

Calling frequency, tariffs, accessibility to the port, port congestion, inter-linked transportation networks

Brooks (1985)

Port costs, frequency of calling vessels, port reputation and/or loyalty, ship direct calling, experience of
cargo damage

Murphy et al. (1991,

1992)

Has loading and unloading facilities for large and/or odd-sized freight, allows for large volume,
shipments, has low freight handling shipments, provides a low frequency of loss and damage, has
equipment available, offers convenient pickup and delivery times, provides information concerning
handling, offers assistance in claims handling, offers flexibility in meeting special handling requirements

Peters (1990)

Internal factors: service level, available facility capacity, status of the facility, port operation policy
External factors: international politics, change of social environment, trade market, economic factors,
features of competitive ports, functional changes of transportation and materials handling

UNCTAD (1992)

Kim (1993)
McCalla (1994)

Geographical location, hinterland networks, availability and efficiency of transportation, port tariffs,
stability of port, port information system
Sea transportation distance, number of liners calling-in, annual volume imported and inland transportation
charges per unit distance, distance between origin and destination, annual cargo handling volume, loading
hours, average detention hours at port, goods value per ton and inland trucking cost per kilometre

Starr (1994)

Port facilities, inland transportation networks, container transport routes

Geographic location of ports, Inland railway transportation, investment of port facilities, stability of port
labour

Rimmer (1998)

Door-to-door service, lower price, reliable, safe, prompt and low cost transport system

Hoyle (1999)
Bookbinder and Tan
(2003)

Good facilities, efficient operation, up-to-date technology

Lirn et al (2003)

Political and currency exchange stability

Port basic physical characteristics, port geographical location, port management and carriers cost
perspective

Song and Yeo (2004)

Cargo volume, port facilities, port location, service level and port expenses

De Langen (2003)
Comtois and Dong
(2007) and Cullinane
et al. (2005)

Ship turnaround time, wage, throughput, connectivity, investment

Ng (2006)

Guy and Urli (2006)

Lee and Rodridge
(2006)

Price, quality of service, central government policies on regional development, natural endowments,
inland transport infrastructure, logistical systems, cargo resources,
Accessibility of the port, time efficiency, cases of delay, cost (terminal handling charge and port dues),
speed, geographical location
Port infrastructures (depth, quay length, cranes, intermodal, interface), total transit cost, service (turnaround time), geographical location (immediate/extended hinterland, possibility to serve other ports within
the same service loop)
Competitive labour costs, the open-market policy, and a substantial amount of capital investments

Wiegmans (2008)

Port (terminal) operation efficiency level; port cargo handling charges; reliability; port selection
preferences of carriers and shippers; the depth of the navigation channel; adaptability to the changing
market environment; landside accessibility; product differentiation
Reveals that port selection mainly depends on the criteria of handling speed, handling cost, reliability and
hinterland connections

Lam and Yap (2008)

Government support, good connectivity, feeder services, more space, lower cost, acquisition

Tongzon (2007)

In the 1980s, Pearson (1980), Willingale (1981), Collison (1984), Slack (1985) and
Brooks (1985) proposed various port selection criteria in Europe, the US and South-east
Asia. The criteria include availability and frequency of shipping lines, accessibility of
ports (navigation), hinterland nearness, connectivity to ports, port facilities, waiting
time, port service capacity, congestion, experience of cargo damage, port costs,
reputation and port tariffs.
76

In the 1990s, Peters (1990), Murphy et al. (1991; 1992), UNCTAD (1992), Kim (1993),
McCalla (1994), Rimmer (1998) and Hoyle (1999) revealed various attributes and
major factors influencing port selection and competition. More criteria were identified,
such as the geographic location of ports, hinterlands networks, external factors
(international politics, change of social environment, trade market, economic factors
and features of competitive ports), investment in ports, stability of port labour, safety,
custom services, speed of cargo handling, door-to-door service, documents simplicity,
reliability, lower cost and up-to-date technology.
Geographic location is one of the key determinants of port competitiveness (SkjottLarsen et al. 2003; Song and Yeo 2004; Gordon et al. 2005; Yeo et al. 2008).
Geographical conditions are the most decisive factor for the localisation of ports,
although this does not exclude competition between areas with geographical conditions
favourable for a port. Port activities are found to be more dependent on geographic
localisation than on other economic activities (De Langen 2004). The location of a port
indicates its location in the global network. It will decide the distance to the industrial
manufacturing region and the distance to the main lines; hence, it will decide the
hinterland areas of the port (UNCTAD 2006).
Song and Yeo (2004) find that location plays the most important role in the evaluation
process of a ports competitiveness in China. They identify a close relationship between
geographical location and cargo volume. They find that location and port facilities are
the two most important competitive factors, and service level has a lower priority for
competitiveness. This indicates that the port sector is still a traditional sector, where
service quality does not play such an important role as hard aspects.
UNCTAD (1992), Starr (1994) and Gordon et al. (2005) all recognise that geographical
location is strategically important for the port sector, especially trade development, in
the global network. Good location helps trade growth as a multiplier effect and
economies of scale effect. Economic growth influences the surrounding areas.
Conversely, the economic prosperity of the surrounding area would promote port
development and its relevant sectors by investment and more cargo sources.
Industrialisation and substantial capital inflows lead to a demand for an integrated
global logistical system to handle increasingly containerised cargoes moving door-todoor from consignors to consignees (Rimmer 1998). The shippers require a reliable,
safe, prompt and low cost transport system that the ocean liner shipping companies are
77

supposed to offer. In response to the need for door-to-door services, since the late 1960s,
deep-sea liner shipping companies have established the necessary globe-spanning
transport and communications networks and marketing arrangements.
Price competition is remarkable in port competition and selection. Transport costs have
been increasing in relative importance for export competitiveness (Sanchez et al. 2003).
To meet price competition, partnership on vessel sharing arrangement and
reorganisation started from independent shipping operators in the early 1990s (Rimmer
1998). The liner shipping companies attain prominence by competitiveness in mainline
and feeder container movements, intermodal rail and truck movements, depot operation,
long haul, container shipping networks and feeder shipping networks, banks and
insurance (Rimmer 1998). A port can be a facilitator to encourage regional development,
if it is well-equipped with up-to-date technology (Hoyle 1999).
In the 2000s, Notteboom and Winkelmans (2001), Lirn et al. (2003), Song and Yeo
(2004), Cullinane et al. (2005), Ng (2006), Guy and Urli (2006), Lee and Rodridge
(2006), Comtois and Dong (2007), Tongzon (2007), Lam and Yap (2008) and
Wiegmans (2008) added more components of port selection and competitiveness,
covering East Asia, North-east Asia, South-east Asia and other research areas. The
recent port selection and competition criteria include port management, cargo volume,
service level, port expenses, government policies on regional development, natural
endowments, logistical systems, cargo resources, port infrastructure, labour cost, openmarket policy, reliability, port/terminal operation efficiency level, port charges, port
selection preference of carriers and shippers, hinterlands connections, terminal
productivity, a ports reputation, adaptability to the changing market environment,
product differentiation, feeder services, more space and acquisition.
The studies of the past 10 years concentrate on Asia, as it is developing rapidly in terms
of both economy and port development. The research of this area represents the
development trend in the maritime and port sector. The following presents some
particular studies in these areas.
Inter-port competition has intensified (Notteboom and Winkelmans 2001) to attract
more customers as cargo sources are limited. If ports fail to attract traffic in a context of
inter-port competition, they will fail and decline. Ports which have already invested
heavily in port technical infrastructure would struggle to keep up with the growing
volume of trade. When new ports emerge, the neighbouring ports would feel the effects
78

of competition. Some ports would cooperate while they compete, such as Shanghai
versus Ningbo, and Fuzhou versus Xiamen.
Lam and Yap (2008) investigate inter-port competition between port Kelang, Tanjung
Pelepas and Singapore. The three ports are all situated in strategic locations along the
Straits of Malacca, Southeast Asia. They are major container ports. Half of all
containers handled there are transhipment containers, which account for 30% of the
worlds transhipment traffic. The authors noted the container port competition dynamics
for transhipment cargo.
Singapores market share declined as Port Klang and Tanjung Pelepas emerged as
credible alternatives for transhipment operations, which encouraged some shipping lines
to relocate their transhipment hubs to these ports from Singapore. The competition
among the three ports had a negative impact on Singapores transhipment performance.
Firstly, the Malaysian government policies attract Malaysian national cargoes through
Port Klang rather than through the Port of Singapore (Robinson 2004). Secondly,
Tanjung Pelepas has good connectivity in terms of shipping network, the availability of
feeder services, more space available and lower port operations costs. Pelepas has
attracted more lines to call. Thirdly, the pressure of the reduction of charges or the
enhancement of efficiency have already motivated Maersk and Evergreen to move their
transhipment business from Singapore across the border to the Port of Tanjung Pelepas
in Malaysia (Cullinane 2004). The acquisition of P&O Nedlloyd by Maersk Sealand
also caused Singapore to lose much transhipment freight to Tanjung Pelepas, where
Maersk Sealand has opened an office.
Comtois and Dong (2007) and Cullinane et al. (2005) analyse the inter-port competition
between Shanghai and Ningbo, which share the same hinterlands. The competition is
intense with the adoption of market-based reforms and the increasing globalisation of
the Chinese economy, as the open-market reform, continued economic development in
the hinterlands and Chinas accession to the WTO all contribute to the growing demand
for port services. The two neighbouring container ports were evaluated on the basis of
price, quality of service and central government policies on regional development.
Shanghais throughput is largely domestic cargo, with international transhipment still in
its infancy. Ningbo would gain greater market share as the result of advantages in its
natural endowments (particularly depth of water), lower price and quality of service
improvements, good inland transport infrastructure and logistical systems, as the
growing cargo resources come from the west stimulated by Chinas policy of
79

development of the western provinces. Quite a few leading liners have already moved
their regional hubs to Ningbo.
Lee and Rodridge (2006) note that competitive labour costs, the open-market policy,
and a substantial amount of capital investments have enabled Chinas ports to compete
against ports from Asia depending on its export-based economy. Chinas economy
boom has generated a huge volume of cargo sources for export to countries worldwide
and has aroused large demand for import from foreign countries via ports.
Before Chinas economic boom, Koreas trade was mainly with Japan and U.S. from
the Southeast ports. However, the growth and expansion of the trans-Yellow Sea supply
chain aroused by the China effect made Korea, Chinas neighbouring country, start to
reorient its regional maritime industry and port system (Yeo et al. 2008). Korea has had
to adapt to the China effect and reposition its capital and facility investment to attract
Chinese cargoes to enlarge its market share. This shift has resulted in a high level of
integration of Sino-Korean manufacturing supply chains and substantial changes in the
regional logistics network have happened by organizing new flows of raw materials and
final products, which accordingly has brought regional port competition within Korea
by creating diverse links.
The prominence of Busan in the port system is challenged by this reorientation, as
Busan has a shipping distance problem and inefficient inland logistics within Korea.
However, Busan still has a significant hinterland and a gateway location for global and
regional trade, with the exception of northern China. In this context, Busan will still
benefit from the growth of Northeast Asian maritime traffic and its hinterlands.
Tongzon (2007) proposes eight key determinants of port competitiveness: efficiency,
port charges, reliability, port selection preferences of carriers, navigation depth,
adaptability to change, landside links and product differentiation. He did an empirical
survey of some manufacturers and 3PLs in Singapore concerning the important factors
that influence their choice of countries as location for their investment. The factors were
identified as market potential/purchasing power, domestic economic and political
environment, related and supporting industries, technology base, government policy and
regulations, social and cultural environment, executive procedures and services,
incentive procedures and services, incentives for foreign investors, business practices
and operation systems, infrastructure development, supply and logistics chain
management strategy, and others (including local partner, total cost of operations,
80

competitive environment, availability of trained people, financial/foreign currency

stability).
Later on, Tongzon (2007) revealed the determinants of competitiveness in logistics in
the ASEAN region (Section 1.1.2). Song and Yeo (2004) identify that cargo volume,
port facilities, port location, service level and port expenses are the five most important
criteria for the competitiveness of port business in Asia. However, due to lack of data on
expenses, they did not include this important criterion in their empirical research.
Lirn et al. (2003) analysed the Taiwan case on transhipment port selection and decision
making behaviour. Lirn et al. (2004) analysed transhipment port selection from a global
container carriers perspective, employing the technique of Analytical Hierarchy
Process (AHP). They categorised port selection criteria into four major criteria and 12
sub-criteria: port physical and technical infrastructure (basic infrastructure condition,
technical infrastructure and inter-modal links), port geographical location (proximity to
import and export areas, proximity to feeder ports and proximity to main navigation
routes), port management and administration (management and administration
efficiency, vessel turn-around time and port security/safety) and carriers terminal cost
(handling

cost

of

containers,

storage

cost

of

containers

and

terminal

ownership/exclusive contracts policy). The five service attributes most significant to

port selection were identified as handling cost of containers, proximity to main
navigation routes, proximity to import/export area, basic infrastructure conditions and
existing feeder network, among which three attributes are subject to the main criterion
of geographical location.
Wiegmans (2008) reveals that port selection mainly depends on the criteria of handling
speed, handling cost, reliability and hinterlands connections. He concludes the
following strategic considerations are influential in port choice: availability of
hinterlands connections, attainability of consumers (large hinterlands), maximum depth
of port approaching route, feeder connectivity, environmental issues and total portfolio
of the port, port ship time (high productivity), reliability (absence of labour disputes),
reasonable tariffs and degree of congestion.
Some studies on port competitiveness in China have been conducted. Ma (2007)
provides indicators for port competitiveness in China, which are shown in Table 3.8.
The indicators were categorised into two levels. He adopts AHP methods to investigate
Chinas ports competitiveness.
81

Port competitiveness

Table 3. 8 Port competitiveness index by Ma (2007)

Level 1 indicator
Cost
Services
Support system for relevant sector
Information system
Natural
conditions
and
infrastructure

Level II indicator
Freight rate, time cost and free charge
Service insurances, service levels/quality and operations
capability
Laws and regulations, criteria, preferential policies
Hardware, software, information support platform
Natural conditions, port hardware, port financial status,
management level

Selected ports
Port A-N

This section has addressed the criteria for port selection with the support of general
literature and detailed cases from Asia. The criteria have been found similar to PPIs.
3.5 Factors influencing port performance
The above sections have considered factors influencing port performance. Section 3.1
gives the components of a port logistics system. As PPIs are closely related to
influencing factors, Section 3.2 reviewed PPIs in detail for up to date knowledge. The
indicators imply which factors to measure and sometimes the indicators themselves
reflect factors. Reviewing factors resulting in successful ports historically and currently
(Section 3.3) gives hints of what factors can improve port performance. Section 3.4
presents components and criteria for port competitiveness and choice, which are also
found highly related to factors influencing port performance. These sections build the
foundation of potential factors influencing port performance.
The factors include natural endowment (geographical location and navigation depth),
seaside links (deep-sea shipping services, feeder services), landside links and port
connectivity between ports and hinterlands (transport infrastructure), port physical
infrastructure (# of berths, quay length), port superstructures (buildings, equipment and
other facilities), port technical infrastructure such as ICT, logistics demand from
economic activity, efficient operations, port services, logistics support including
government support and other services, development potential, port management such
as risks, safety, etc. which can be classified and presented in Figure 3.3.
Tongzon (1995) found that only a few studies have attempted to explain and identify the
various factors underlying a ports performance. He employed throughput and
efficiency as PPI. He selected location, frequency of ship calls, port charges, economic
activity and terminal efficiency as factors influencing throughput; and he selected
container mix, work practices, crane efficiency, vessel size and cargo exchange as
factors influencing efficiency. His research found that terminal efficiency and crane
productivity are vital determinants of improving port performance, by quantifying the
contribution of each factor to the overall determinants of port performance.
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Landside links:
Transport infrastructure

Seaside links:
shipping
services
feeder services

Port superstructure:
Facilities, equip. etc

Port infrastructure:
Navigation, # of berth

Efficient operations
Port
Performance

Value-added services

Geographical location
Logistics demand
Cost: shipping price,
port charge, overall cost

Navigation

Government support
Development
potential

Front port, back factory

(E.g. Hongkong)

Skills and safety

Finance
services

Information
system services

Risks: delays; congestion

Cargo damage/loss

Figure 3. 3 Categories of factors influencing port performance

Economic activity and logistics demand are highly related and they strongly influence
port performance, as the types of import and export products depend on the economic
development level, product structure and world economy status. The wealthier the local
economy is in the hinterland, the greater the volume of throughput. The stronger the
world economy, the better the international trading, as there will be more demand for
international products when the economy is booming. The world economic crisis in
1929-1933, the Asian financial crisis in late 1990s and the world economy recession
starting from 2008 have seriously influenced international trade and port performance.
The support of the local economy for port performance depends on the scope of
hinterlands, the population within the scope, and the industries in the hinterland. The
scope of hinterlands is highly related to cargo volumes, which explains why hinterlands
are important (Section 2.3.6). For population, larger populations have bigger demand
for consumption. For example, Shenzhen developed from a village into a modern city of
more than 100 million citizens and 200 million people from all over China within 20
years. People who are attracted here have brought huge consumption demand. The
consumption would require different products imported or domestically produced,
which would influence port cargo volume accordingly. As for industries, electronic
industries provide cargoes with higher value than light industries.
Pettit and Beresford (2008) examine port performance by annual cargo tonnage. They
find that EU expansion, increasing use of unit loads and a move towards Far East
sourcing are the important factors influencing UK ports long-term performance from a
regional perspective. Analysing Shanghais port economy produces the influencing
83

factors as hinterlands economy, international trade, port capacity, port investment and
operations capacity (Ren and Wang 2007). Bichou and Gray (2004), Wiegmans (2008),
and Yeo et al. (2008) note that interconnectivity of the port (sailing frequency of deepsea and feeder shipping services) is an important criterion for port choice strategy and
decision-making. References can also be referred back to Sections 3.1-3.4.
Government policy and regulations are identified as a determinant of a country selection
by international manufacturing firms (Tongzon 2007). Port efficiency is influenced by
public policies (Sanchez et al. 2003). Government can intervene in port operations.
Different government policies would be adopted in different institutions. The more open
the economy, the better the volume and value of imports and exports, which largely
depends on the policy. In China, as it is at the stage of transitional economy,
government behaves like a visible hand to intervene in the market to certain degree,
including what products to produce, and how many to produce for certain products. The
Chinese government also intervenes in the port market, with national and provincial
policies on how ports should perform.
The factors reflect the improving quality of port services, the changing business
environment and fierce port competition (Yeo et al. 2008). Based on the components of
port system by ADB (Banomyong 2007), twenty factors were selected from the
literature for further investigation and analysis. However, some determinants were
found to be interrelated. To eliminate overlapping and less important determinants,
interviews were conducted with 40 port experts from various port stakeholders,
including shipping lines, cargo interests, PSPs, port managers and other port
stakeholders. First 15 factors were extracted during the interviews as shown in Table 3.9.
As all the studies listed in the reference column have been validated, the variables have
content validity. The references can also be traced back to Sections 3.1-3.4 for all the 15
factors. Besides the factors reviewed above, there are other factors that influence port
development. The new trend of environmental protection requests green logistics, which
is one factor that influences port performance, such as emerging regulations on
environmental issues and requirement of water quality in the port. Other factors
influencing port performance are identified as political stability (Peters 1990; Lirn et al.
2003), cultural difference (Luo et al. 2001), change of social environment (Peters 1990;
Tongzon 2007; DFT 2009), port reputation (Wiegmans et al. 2008), regulations
(Comtois and Dong 2007) and image marketing (Rozenblat 2004). However, these

84

factors are not included in the questionnaire survey due to time and funding constraints,
data availability and difficulty in quantification.
Table 3. 9 Factor choice for empirical research
F1

Factors
Availability of
frequencies, etc)

F2

Price of shipping services

F3

Port/ terminal handling, warehousing and other charges

Tongzon and Heng (2005), Arvis et al 2007, Talley 1996,

Gordon et al 2005, Brooks 1985

F4

Feeder connections to the deep-seaports and the major

shipping lines
Port / shipping service is on the cheapest overall route
to the destination

Carbone and Gouvernal (2007), Wiegmans (2008), Yeo et

al., 2008
Notteboom and Rodrigue 2005, Arvis et al 2007, Bichou
and Gray 2005, Bichou 2006, UNCTAD 2006

F6

Speed of port cargo handling

Wiegmans et al. 2008, Gordon et al. 2006, Talley 1996,

UNCTAD 2006

F7
F8
F9

Congestion, risks and other risks

Port/ terminal security and safety
Technical infrastructure of the
equipment, ICT, etc)

F10

Proximity of the port to your customers and / or sources

of supply
Availability of skilled employees in the region
Quality of landside transport links (inter-modal links)

Wiegmans et al. 2008, Slack 1985, Talley 1996

Wiegmans et al. 2008, DFT
Murphy 1991, 1992, McCalla1994, World Bank 2005, Wu
2008, Gordon et al 2005, UNCTAD 2006, Xiao et al.
(2008), Arvis et al 2007
Lirn et al. 2004, Wiegsmans et al. 2008, UNCTAD 1992,
Gordon et al 2005, Starr 1994, Yeo et al. 2008
Wu 2008
Wiegsmans et al. 2008, Bichou and Gray 2004, Slack
1985, UNCTAD 1992, McCalla 1994, Joly & Martell
2003, Xiao et al. (2008), Arvis et al. 2010

F5

F11
F12

shipping

services

(destinations,

port

(handling

References
Bichou and Gray (2004), Carbone and Gouvernal (2007),
World Bank Survey (2005), Wiegmans (2008), Slack
(1985), Wiegmans (2008), Arvis et al. 2010
Gordon et al. (2005)

F13

Availability and quality of logistics services

(warehousing, freight forwarding, cargo handling, etc)

Bichou and Gray 2004, Slack 1985, Talley 1996, Robinson

2006, AAPA, Wu 2008, UNCTAD 2006, Arvis et al 2007

F14

Government supports for logistics activities and new

developments in the region

Arvis et al 2007, Wang & Oliver 2003

F15

Depth of navigation channel

Wiegsmans et al. 2008, DFT

F16

Ship turnaround time

F17

Customs services

De Langen et al. 2007, Trujillo and Nombela (1999);

World Bank; Carbone and Gouvernal (2007); Gordon et al
(2005); Xiao et al. (2008)
Bichou (2006); Arvis et al. 2010

F18

Efficiency

Gordon et al. 2005; Tongzon 1995

F19
F20

Tracking capability
Adaptability to the changing market environment

Arvis et al. 2010

Tongzon 2007

Note: F: factor
3.6 Chapter summary
This chapter firstly reviewed the components of a logistics system for ports. This was
followed by reviewing logistics performance indicators. The PPIs were categorised.
Then the factors resulting in some ports good performance were reviewed, and criteria
for port competitiveness and choice were addressed. The literature came up with factors
influencing port performances. As a port is a node in a supply chain to provide services
to the shipping lines and shippers, the factors selected in Section 3.5 are all virtually
related to port services from different perspectives. The next chapter will address the
research methodology and how the empirical research was conducted.

85

4. METHODOLOGY
The preceding chapters reviewed the literature on port position in logistics chain, port
functions, port selection, trends in maritime freight transport, the historical and current
successful ports, port performance and factors influencing port performance. The
literature review also considered the theory underpinning this research. This chapter
builds upon this work and describes the background to this research from a
methodological point of view.
This chapter consists of seven sections. The first section presents the research objectives,
as the methodology used is to provide data to investigate the objectives. The second
section explains and provides a rationale for the research design, which was
implemented through the use of mixed methods by interviews and a questionnaire-based
survey. Specifically, an overview of the research design is given. The section also
discusses a number of methodological considerations on research philosophies, research
approaches, research strategy, research methods, research context as well as research
process. It aims to make explicit the assumptions of the researchers philosophical
stance and provide assurance that appropriate procedures were followed. The decision
to combine qualitative and quantitative approaches is justified. The third section
explains the procedures of conducting the semi-structured interviews, questionnaire
surveys and other methods for data collection in this research. This section also
considers issues related to the design and delivery of the survey, including piloting and
conducting interviews/questionnaires. The fourth section describes the procedures used
to define the population for this research. Sampling techniques, choice of research
locations and interviewees are explained. The fifth section introduces the methods used
to analyse the data in this research. The research validity and reliability are also
presented. The sixth section addresses importance-performance analysis. The seventh
section explains ethical issues. The last section provides a summary of the chapter.
4.1 Summary of research objectives
It is important to address the research objectives before coming to the research
methodology, as the nature and context of research objectives will determine the
specific research methodology to follow (Saunders et al. 2009). As explained earlier in
Chapter 1 and the literature review, there has been little research on the factors that
determine port performance and little empirical comparison between Asian and
European port performance has been made, although some research has been done on
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port competition and port performance. This research aims to fill this gap and explore
the factors that determine port performance and investigate in what aspects different
port regions perform differently, and how differently they perform. To achieve these
aims, the objectives of this research are to:
1.
2.
3.
4.
5.

Identify the key factors that drive port performance and choice
Investigate the differences in importance and performance among these factors
Analyse how the factor importance and performance vary for different ports
Analyse the role port hinterland plays in port performance and choice
Illustrate the usefulness of the key findings from the analysis for port stakeholders

The extant limited knowledge of factors influencing port performance in the context of
global supply chain management demands the use of research tools that are likely to
yield fruitful data, both qualitative and quantitative, to achieve the objectives. This need
is met by employing an appropriate research design that consists of a number of
methodological considerations on research philosophies, research approaches, research
strategies, research methods, research context and research process.
4.2 Research design
A research design is a plan and the procedures for an investigation to be conducted,
based on the nature of the research problem or issues being addressed and the
researchers personal experience (Creswell 2009).

Figure 4. 1 The research design onion

Source: adapted from Saunders et al. (2009)

The research methodology tells readers how the researcher chooses the available
methods and conducts the research. It should reflect the overall process, in which the
research philosophy, research approach, research strategy, data collection methods and
data analysis are consistent (Saunders et al. 2009). The Onion proposed by Saunders
et al. (2009), depicted in Figure 4.1, was used as a guide to the research design.
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4.2.1 Research philosophies: positivism, interpretivism and pragmatism

Before deciding on the methodological issues, it is useful to understand different
research paradigms and it is important to be explicit about philosophical perspectives,
because they shape the way that researchers conduct research and influence how data
are collected, analysed and interpreted.
A paradigm, basically a world-view, is central to the process of research in all areas
(Saunders et al. 2009). It is a set of basic beliefs that defines the nature of the world and
the individuals place within it and guides action (Guba and Lincoln 1994; Denzin and
Lincoln 2000). This research belongs to the field of business and management, where
there are often two main research paradigms or philosophies, labelled positivism and
interpretivism (Hussey and Hussey 1997; Collis and Hussey 2003). Table 4.1 shows the
alleged differences between the two paradigms.
Table 4. 1 Positivism vs. interpretivism
Metatheoretical
assumptions
Ontology

Question

Theory of truth

What is the nature of

reality?
What is the relationship
between the researcher
and the researched?
Is
research
object
independent
or
dependent?
What is the process of the
research?
Singular or multiple?

Validity

Is it valid?

Reliability

Is it reliable?

Epistemology

Research object

Method

Positivism
Person (researcher) and reality are
separate.
Objective reality exists beyond the
human mind.
Research object has inherent
qualities that exist independently of
the researcher.
Deductive process cause and effect.
Statistics, content analysis.
Correspondence theory of truth:
one-to-one
mapping
between
research statements and reality.
Certainty: data truly measures
reality.
Replicability: research results can
be reproduced.

Interpretivism
Person (researcher) and reality are
inseparable (life-world).
Knowledge
of
the
world
is
intentionally constituted through a
persons lived experience.
Research object is interpreted in light
of meaning structure of persons
(researchers) lived experience.
Inductive process
Hermeneutics, phenomenology
Truth as intentional fulfilment:
interpretations of research object
match lived experience of object.
Defensible knowledge claims.
Interpretive awareness: researchers
recognise and address implications of
their subjectivity.

Source: adapted from Weber (2004), Hussey and Hussey (1997) and Creswell (2009)

Positivism entails an ontology that researcher and reality are separate and reality is
universe made up of atomistic, discrete and observable events, while interpretivism
entails that researcher and reality are inseparable and reality is internal & socially
constructed (Weber 2004). The interpretative paradigm is viewed as qualitative,
inductive and subjectivist, while the positivist paradigm is described as quantitative,
deductive and objectivist (Burrell and Morgan 1979; Hussey and Hussey 1997; Denzin
and Lincoln 2000; Gummesson 2000). Positivism and interpretivism are often known as
the opposing ontological and epistemological perspectives of research (Weber 2004).

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Positivism
Positivism seeks to solve major practical problems and discover precise causal
relationships through statistical analysis (Kim 2003). Positivism argues that reality or
knowledge is objective, independent, external and singular (Hussey and Hussey 1997).
Ontologically, positivists believe that deductive reasoning, scientific inquiry and
replicable findings will converge upon objective truths (Plack 2005). In its
epistemology, knowledge is derived from sensory experience by experimental or
comparative analysis, and concepts and generalizations are shorthand summaries of
particular observations (Blaikie 1993).
Positivism supports the idea that the emphasis of science is on scientific objectivity
(Dupuis 1999). In order to obtain objective and accurate data, researchers must separate
subject from object, and things such as selves, personal experiences and emotions
should be removed (Dupuis 1999). In other words, the social world should be measured
through objective and quantitative methods to obtain quantitative data, and theory
testing is emphasized.
Positivism has had a profound influence on the development of research traditions in the
natural and social sciences (Plack 2005). It is widely applied in social science to
generate more accurate, measurable and objective data (Burrell and Morgan 1979). This
research belongs to the social sciences, because it aims to grasp the social dimensions
and management behaviours in ports.
Interpretivism
Interpretivism originates from the intellectual traditions of hermeneutics and
phenomenology (Kim 2003). Bryman and Burgess (1999) define interpretivism as a
strategy of social research concerned to interpret social phenomena in terms of
meanings. The emphasis in interpretivism does not focus on the measurement and
prediction of phenomena, but on social actors own language, experiences and
perceptions (Lee 1991). In an interpretivists epistemology, knowledge is derived from
everyday concepts and meanings (Blaikie 1993).
Interpretivists attempt to understand not only what is happening, but also why it is
happening. In the areas of social science research, influential contextual factors, and
personal experiences and emotions, which are often ignored in natural science research,
should be taken into consideration, given the inter-subjectively created meanings of the
social world (Lee 1991; Dupuis 1999; Kim 2003). This is why qualitative methods and
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theory building/generation are preferred to theory verification in exploring the social

world to obtain qualitative data.
The positivist approach and the interpretive approach appear to be in opposition, as the
positivists claim that methods of natural science are the only truly scientific ones, while
the interpretivists counterclaim that the research of people and their institutions calls for
methods that are altogether different from those of natural science (Lee 1991). While
the positivist position may continue to dominate natural and social sciences, more and
more interpretivists generally view reality as being socially constructed (Punch 1998;
Denzin and Lincoln 2000; Silverman 2000; Vaus 2001).
Pragmatism
Pragmatism is not committed to either of the above philosophies and views of reality
(Creswell 2009). Pragmatists hold the view that pragmatism is neither interpretivist nor
positivist, and that it is perfectly possible to work with both philosophies (Creswell
2009; Saunders et al. 2009). This philosophy claims that mixed methods, both
qualitative and quantitative, are possible and highly appropriate within one research to
provide more comprehensive evidence and strength than one method (Blaikie 2009).
The researchers philosophical stance depends on the nature and objectives of the
research. In this research, to address the research objectives in Section 4.1, the
researcher needed to collect both qualitative data (which deal with more depth and
insightful exploration with limited number of interviewees) and quantitative data (which
can be collected from wider samples for generalization). This implies that the researcher
is a pragmatist. The philosophy of pragmatism underpins the researchers choice of
mixed methods in this research, which will be addressed in Section 4.2.4.
4.2.2 Research approaches
Generally speaking, there are two main dimensions of choices on research design: one is
deductive research or inductive research, the other one is considerations over concrete
methods (Collins and Cordon 1997). The research approach addresses choice of
deductive or inductive. Corresponding to philosophies of interpretivism and positivism,
inductive research (theory is an outcome of research) involves the construction and
explanation of models and theories while deductive research (theory guides research)
involves the testing of a theoretical and conceptual framework by empirical studies
(Vaus 2001).

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Strauss and Corbin (1990) indicate that primarily the choice of research approaches
depends on the nature of the research problem and research purposes. The research
purposes are categorised as exploratory, explanatory and descriptive (Creswell 2009;
Yin 2009). Exploratory research is undertaken when an issue or phenomenon is little
understood and little research has been done on it (Creswell 2009). Punch (1998) claims
that an inductive approach is suitable for an area lacking appropriate theories. Normally,
an inductive approach is suitable for exploratory purpose to look for patterns and ideas
(Hussey and Hussey 1997), and it is employed in exploratory research to arrive at a set
of assumptions on which to base the research design (Crimp 1990). Some exploratory
studies may have a legitimate reason for not having any proposition but it is necessary
to state clearly the research purpose (Yin 2009). This applies to the current research.
Descriptive research is conducted to describe the features of the variables of interest in a
situation (Sekaran and Bougie 2010), and to portray the profile of situations (Robson
2002). A deductive approach is suitable for descriptive research (Neuman 2006;
Sekaran and Bougie 2010). An explanatory study is used to establish relationships
between variables, and both deductive and inductive approaches can be applied to it
(Saunders et al. 2009).
As the differences between deductive and inductive research are narrowed down, an
approach that combines these two is becoming popular (Gummesson 2000). A
combined approach can provide a better understanding of a specific research topic
rather than two separate ones.
The main problem with the interpretive paradigm and inductive approach is concerned
with the lack of generalisability of the qualitative data. Malhotra and Birks (2003) argue
that an inductive process means that researchers might reach conclusions without
complete evidence. Denzin (1983) and Punch (1998) argue that generalization should
not necessarily be the sole objective of all research projects; and the purpose of research
should depend on the context within which it is embedded.
From an interpretive perspective, other researchers do not have to agree completely with
the claims one researcher has made (Weber 2004), given that interpretivism is
inherently subjective, and contextual factors and the researchers personal history,
experiences, and emotions often have a great impact on the result of the research.
Interpretivists are intended to uncover and address the issue of a specific reality and

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learn more of a phenomenon within the social world. Therefore, interpretivist research
and inductive processes may not necessarily lead to any universal concept or theory.
In terms of research purposes, the current research has exploratory, descriptive and
explanatory purposes. Firstly, this research is exploratory. As addressed in section 4.1,
since there are no well-established theoretical frameworks for factors determining port
performance and little research has been conducted on the factors, an inductive
approach is proper for scrutinizing and exploring the research issues. This research thus
employed an inductive approach in Phase 1. Secondly, this research is descriptive, as it
describes the factor importance and factor performance in different regions. A deductive
approach is appropriate to address the comparison in Phase 2 and test the results from
Phase 1 (Sekaran and Bougie 2010). Thirdly, this research is explanatory, as it
establishes the relationships between different factors, both within regions and across
regions.
To address the different purposes, as explained earlier, a combination of inductive and
deductive approaches is suitable to achieve the research objectives. The two-phase
approach of inductive-deductive process is shown in Table 4.2.
Table 4. 2 Research phases

Phase 1 inductive

Phase 2 deductive

Input

Output

Desk-based analysis
Interviews with local port stakeholders
Thematic analysis
Questionnaire developed and distribution to port
stakeholders
Data analysis using SPSS

In-depth insight into port importance factors; platform

established for phase 2 research
Determinants of port performance
Validation results of phase1

4.2.3 Research strategy: survey

According to Saunders et al. (2009), research strategies include experiment, survey,
case research, grounded theory, ethnography and action research. The choice of the
current research strategy was guided by the research objectives. This research excluded
experiment because it is typically applied to studies where variables can be controlled,
which is not the case of this research. Case research was excluded as it is confined to a
specific context, whereas this research aims to seek some factors that may apply to
general ports. Action research was excluded due to time, finance and accessibility
constraints, because it requires that the researcher be part of the organisation.
Grounded theory and ethnography were excluded as they are purely qualitative and
cannot achieve the research objectives by providing required quantitative data.

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According to Punch (1998), survey refers to any research method for data collection
(quantitative or qualitative) from a sample of people. The survey strategy is known as a
popular strategy and is widely used for exploratory and descriptive research in business
and management research to answer who, what, where and how much questions
(Saunders et al. 2009). The data from survey allow easy comparison, explanation and
understanding. As this research needed to collect real world data from port stakeholders
as addressed in Sections 4.1 and 4.2.2, survey suited the current research objectives and
was therefore selected as the research strategy.
In terms of time-horizons, this research is cross-sectional as it seeks to collect necessary
data to describe the different factors that influence port performance as a snapshot of
the situation at a given time (Saunders et al. 2009). A longitudinal research was judged
inappropriate and rejected for the research in the current situation. This research was not
designed as a longitudinal one. Robson (2002) and Easterby-Smith et al. (2008) claim
that cross-sectional studies often employ the survey strategy. This further supports the
suitable choice of survey as the research strategy for this research. Having justified the
research strategy, the next section will address the detailed research methods.
4.2.4 Research methods
Empirical methods are receiving increasing attention due to the growing calls to
incorporate real world data in order to improve the relevance of business research.
Quantitative and qualitative methods are the two basic methods of collecting empirical
data in business and management. Quantitative refers to any data collection technique or
data analysis procedure that generates or uses numerical data, while qualitative refers to
any data collection technique or data analysis procedure that generates or uses nonnumerical data (Saunders et al. 2009). Qualitative research is generally related to the
interpretivist paradigm and inductive approach, while quantitative research is generally
related to the positivist paradigm and deductive approach.
Qualitative and quantitative data are actually closely related to each other and the rigid
distinction between qualitative and quantitative approaches is no longer popular, as all
quantitative data are based on qualitative judgement while all qualitative data can be
described and controlled numerically (Blaxter et al. 2001). With no significant
difference between qualitative and quantitative, management research has tended to
adopt mixed methods, which have come of age, and the practice of research has
involved much more than philosophical assumptions (Creswell 2009). Naslund (2002)
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encourages using both qualitative and quantitative methodologies because research

conducted within a narrow methodological domain would result in underachieving.
Mixed methods can generate both quantitative and qualitative data that can complement
or cross-validate each other.
Mixed methods have gained popularity as a result of approach development and have
the strengths of both qualitative and quantitative research (Creswell 2009). Whilst all
methods have limitations, mixed methods could neutralize, reduce or overcome the
inherent bias and sterility of a single method or approach (Saunders et al. 2009;
Creswell 2009).
According to Bryman and Bell (2007), qualitative research deals with words while
quantitative research entails numerical data and quantitative terms, and exhibits a view
of the relationship between theory and research. Both methods may be combined in one
research project from an inductive and deductive point of view to create a theory which
is then tested with a survey (Bryman and Bell 2007; Creswell 2009). This means a
combination of both qualitative and quantitative methods may be used in one research.
In terms of concrete methods choice, the available techniques are field observation,
secondary data, a questionnaire survey, interviews or combination of the two (Saunders
et al. 2009). In-depth interviews are often used as the preferred research methods by the
interpretivist to obtain qualitative data while questionnaire surveys are preferred
methods by the positivist to obtain quantitative data. Again, the appropriate methods to
choose depend on the researchers goal and the nature of the research objectives
(Creswell 2009).
Table 4. 3 Research methods used in port research
Author

Interview

Methods used
QuestionCase
naire
research

Yeo et al. 2008, 2010

Islam et al. 2006

Lam and Yap 2008
Wiegmans et al. 2008
De Langen 2007
Tongzon 2007
Comtois and Dong 2007
Ng, 2006
Guy and Urli 2006

Lee and Rodridge 2006

Cullinane et al. 2005
Song and Yeo 2004
Lirn et al. 2003 2004
Bookbinder and Tan 2003
Tongzon 2002
Mangan et al. 2002

Secondary
data

Data
AHP+
compromise
weight,
port
stakeholders
Delphi, local experts
analyse annual slot capacity (1999-2004)
12 deep-sea container operators
Four port regions with different clusters
Survey with Singapore manufacturers
Hinterlands
global top 30 liner shipping companies
Montreal-New York Alternative

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surveys on a group of experts

Global top 20 shipping lines
European vs. Asian logistics system
shippers from Southeast Asia
Irish port/ferry choice in RoRo

Table 4.3 shows that in the literature of port performance and choice, most researchers
have adopted quantitative research by questionnaire survey or secondary data.
Interviews and case studies have also been employed in port studies, although they have
not been used so often as questionnaires and secondary data collection. This gives
evidence to support Mentzer and Kahn (1995) and Mangan et al. (2004) who identity
that the majority of research in logistics and SCM is dominated by quantitative
methodologies through a positivist lens. Langen (2007) and Mangan et al. (2002)
employ mixed methods. At the mean time, the evidence in the literature also indicates
different methods have been used in research in the port sector.
As explained earlier, this research is exploratory, descriptive and explanatory.
Exploratory research merits a qualitative approach for gathering data (Neuman 2006;
Sekaran and Bougie 2010). This means that qualitative methods are appropriate when
the topic needs to be explored, and the research questions, often beginning with how
or what, focus on describing what is happening in this area (Creswell 1998). Saunders
et al. (2009) add that both qualitative and quantitative data can be collected to address
an explanatory research, and this is underpinned by a combined approach of inductive
and deductive, as explained in Section 4.2.2. They also note that cross-sectional studies
can employ both quantitative and qualitative methods and a survey strategy was
justified for this research in Section 4.2.3. In addition, questionnaires, interviews and
observations often fall into the survey strategy (Saunders et al. 2009). Therefore,
interviews and questionnaires were employed in this research for data collection in two
phases to match the inductive and deductive approach, as justified in Section 4.2.2.
In the light of the above considerations, this research employed mixed methods to
obtain both insightful qualitative data and generalisable quantitative data, as neither data
alone could fulfil all the research objectives. The mixed methods were adopted by a
sequential exploratory strategy, which was characterized by an initial phase of
qualitative data collection and analysis, followed then by another phase of quantitative
data collection and analysis. The data collected through these two methods can
complement each other to reach more valid findings.
Specifically, exploratory interviews were adopted in phase 1 to yield valuable initial
insights into factors influencing port performance based on the literature.
Questionnaires were employed in phase 2 to generate quantitative data and validate the
findings from interviews. The rationale for obtaining qualitative data from exploratory
interviews followed by quantitative data from a quantitative survey method with a large
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sample was that a useful survey of factors that influence port performance could best be
developed only after a preliminary exploration of factors (Creswell 2009). In this way,
the researcher could generalize the results to a population.
The primary focus of this research was to explore the phenomenon of certain factors
influencing port performance. The first phase resulted in some elements of an emerging
theory, and the second phase was intended to generalize qualitative findings to different
samples and enhance the findings of Phase 1. The two-phase approach has the
advantages of being easy to implement and straightforward to describe and report, and
is useful when a researcher wants to explore a phenomenon and wants to expand on the
qualitative findings (Creswell 2009).
The rationale for and use of individual methods will be discussed fully in Section 4.3.
However, before this, the research context and an overview of the whole research
process will be provided.
4.2.5 Research context
This research was empirically conducted in the UK and China. The following justifies
why the two countries were selected.
As the research gap justified in Chapter 1 and from the literature reviewed in Chapter 3,
no cross-cultural study has been previously conducted on factors influencing port
performance and choice with reference to Europe and Asia, although there were some
studies within Europe (Ng 2009) and Asia (Yap and Lam 2006; Yeo et al. 2008)
themselves. Asia-Pacific, Asia-Atlantic and Europe-Far East are well known as the
three busiest sea shipping routes, as the Asian economy has been booming in the past
two decades. For the reason that the two regions are important for international trade but
lack empirical cross-culture study, Asia and Europe were chosen. In addition, the UK
and China were selected as the sample countries for the following reasons:
Firstly, the UK represents a developed country with maritime history. The UK is the
earliest industrialised country, which developed on the basis of international trade,
while China is the biggest developing country and it has developed the most quickly in
the past 30 years, relying on international trade. The UK is a mature market economy
while China is in the process of transformation from planned economy to market
economy. The UK was ever the strongest economy in 200 out of the recent 500 years;
China is currently the current strongest economy in the world. Its export by value is No.
1 and import is No. 2 in the world (World Bank 2010). Thirty-seven percent of UK
96

GDP was derived from international trade while seventy percent of China GDP was
derived from international trade in 2004 (UNCTAD 2004). Both countries have strong
trading backgrounds, which is inseparable from ports.
Secondly, UK and China are good for port research as there are rich port sources of
information in these two countries. The UK offers a good opportunity for port research
as around 200 ports by Lloyds report in 2005 and 600 ports by Oxford Economic in
2009 (the number of ports are different because of different classification) are well
distributed around Britains coast and 95% of its international trade freight is handled
at the ports. Sea shipment is the main channel to connect the UK with other countries.
Its ports play a very important role in economic development in terms of international
trade. China can boast of a long coast line with rich port resources and a number of
large ports 6 out of the top 10 ports worldwide are in China according to the AAPA in
2009. 90% of Chinas international trade freight is handled via the ports (Li and Guo
2007; Huang 2009). As the largest developing country with the fastest growing
container port industry in the world today, China fits well as a case for detailed
investigation.
Thirdly, in terms of availability of shipping services, short-sea business and rapidly
growing links with low-cost Far East trading partners have largely replaced the UKs
traditional trade routes in response to European Union (EU) expansion (Pettit and
Beresford, 2008). In China, due to the booming international trade in the past three
decades, international deep-sea shipping lines have been operating worldwide. Research
in these two countries can investigate the different employment of deep-sea and short
sea services.
In the UK, the Humber was chosen because it accounts for a large share of UKs
international trade. Xiamen was chosen because it is located in one of Chinas special
zones. This is further explained in Section 4.4.1.
These facts demonstrate the UKs and Chinas seaport market position and they are two
important countries to study port performance and choice in terms of a developed
country and a developing country, and in terms of a European country and an Asian
country.
4.2.6 Research process
It cannot be overemphasized that an empirical research should be conducted in a
structured way. Table 4.4 shows the stages of this research, applying Stuart et al.s
97

(2002) five-stage research process model. In this research, stage one consisted of
defining the research objectives, and was addressed in Section 4.1. Stage two was
research instrument development. Stage three was collecting data from the field in two
phases, as specified in Section 4.2.4: Interviews (January-March 2009) and
questionnaire survey (May-July 2009). Stage four involves the researcher making sense
of the data to extract patterns and themes by data analysis. This included three aspects: 1.
interview data analysis, which helped refine the research objectives on factors
influencing port performance and helped with the survey design; 2. questionnaire data
analysis; 3. Cross-data analysis. At the final stage, the researcher disseminates the
research findings by writing up the thesis.
Table 4. 4 Stages of this research (adapted from Stuart et al. 2002)
Stages

Objectives

Time

Stage 1: Research objective

Develop research objectives

Oct. 2006- Jul. 2008

Stage 2: Instrument development

Develop a survey protocol

Aug. 2008 Dec. 2008

Stage 3: Data gathering

Stage 4: Data analysis

Interviews
Questionnaire surveys/interviews
Within and cross regional analysis

Jan.-Mar. 2009
May to Jul. 2009
Aug. 2009 to Feb. 2010

Stage 5 Dissemination

Thesis writing up.

March 2009 to Nov. 2010

Literature review
(initial variables)

Phase1interviews
(Humber 20 + Xiamen 20)

Design population
& samples

Interview analysis:
thematic analysis

Design population
& samples

Phase 2
Design questionnaire
Humber Phase 2
Large scale survey
(200 samples and
92 valid responses)

Pilot test questionnaire

Xiamen Phase 2
Large scale survey
(300 samples and
162 valid responses)

Survey distribution
and follow-up

Humber
analysis

data

Questionnaire data analysis

-data cleaning
-factor analysis (RO1)
-comparison analysis by IPA,
t-test and kruskal wallis (RO1-4)

Combined analysis
to address research objectives
(RO1-5)

Figure 4. 2 Research process

(RO1-5 refer to research objectives 1-5)

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Xiamen data analysis

For more focus on the empirical procedures, the process is presented in Figure 4.2.
Factors that may influence port performance were extracted from the literature. As
addressed in Section 4.2.4, empirical data were collected in 2 phases. In Phase 1,
piloting was done before interviews. Then face-to-face semi-structured interviews were
conducted with 40 (20 in the Humber and 20 in Xiamen) port stakeholders to obtain
qualitative data (Section 4.3.1). The researcher sought to explore what was happening in
the field, listen to participants and build an understanding based on what was heard
(Creswell 2009). This phase was exploratory, qualitative and inductive, as explained in
Section 4.2.2 and earlier in this section. It aimed to result in a firm grasp of the essential
character and purpose of the specific research survey to be conducted (Chisnall 2001).
The literature and the themes drawn from Phase 1 formed the foundation of the
questionnaire. After the design of questionnaire, pilot tests were conducted for validity,
as suggested by Saunders et al. (2009). This was followed by questionnaire amendment.
Then Phase 2 consisted of a cross-sectional research by questionnaires with port
stakeholders to discover whether the findings from the interviews could be generalized.
Five hundred questionnaires were distributed (Section 4.3.2).
Following the response collection, data analysis was conducted, including data cleaning,
normality test, factor analysis, descriptive analysis, comparison test and IPA. As the
data were collected from two different port regions, the analysis was conducted
separately and collectively for interviews and questionnaires, depending on the research
objectives. The data were also cross analysed as they may cross validate each other. For
example, to achieve a holistic view of the empirical research, combined data analysis
was conducted for factor analysis. Data analysis will be discussed in detail in Section
4.5.
This section has provided an overview of a clear and rigorous research design. Section
4.2.1 explained the researchers pragmatic philosophical stance. This underpinned the
combined research approach of both inductive and deductive approaches in this research,
as explained in Section 4.2.2. A survey strategy was justified in Section 4.2.3 and the
use of mixed methods of both qualitative and quantitative data collection by interviews
and questionnaires were explained in Section 4.2.4. The research context was given in
Section 4.2.5. A detailed picture of the research process was given in Section 4.2.6, to
show clearly conditions of each element of the design. The individual methods used are
explained in the next section.

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4.3 Discussion of current research methods

As explained in earlier sections, interviews and questionnaire surveys were chosen for
the main data collection. This section will discuss the detailed considerations for their
application.
4.3.1 Semi-structured interviews
Advantages of interviews
In qualitative data collection, the interview is the most widely used research method
(Fielding and Thomas 2001). In-depth interviews and group discussions are two of the
most commonly used methods for interviews, and are used to obtain a first-person
description of some specific domain of experience (Cope 2005). Interviews are
conducted to allow a free range of responses to emerge in the participants own words
and produce a rich source of data (Zoltan and Laszlo 2007). Being a conversation with a
purpose (Marshall and Rossman 1999), the interview encourages respondents to become
involved in active interactions and talk about the research subject, leading to negotiated,
contextually based results (Fontana and Frey 1998). Hence, it is an extremely flexible
research tool. Saunders et al. (2009) note that a principal way of conducting exploratory
research is to interview experts in the subject. That is why interviews were first used
to explore port stakeholders views on factors influencing port performance.
Justification of semi-structured interview
Interviews are classified into structured interviews, unstructured interviews, semistructured interviews and focus groups. In a structured interview, there is generally little
room and flexibility for variation in response because of its closed-ended questions.
Given the research objectives posed in the preceding chapters, structured interview was
rejected as it cannot explore in-sight factors. Unstructured interview was also rejected
because it is too open and free for the interviewees to deviate from the research
objectives, as the interviews are conducted without a planned sequence of questions.
Although group discussion has some benefits of cost and time advantage, and new idea
generation (Crimp 1990), this, too, was excluded from this research, given the fact that
interviewees might not be willing to talk freely within groups and it would be difficult
for the researcher to arrange for a group of people to meet together at the same time.
The questions were designed to be as open-ended as possible in a careful and theorizing
way in order to gain spontaneous information, as suggested by Feilding and Thomas
(2001).
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Malhotra and Birks (2003) define in-depth interview as an unstructured, direct and
personal interview to uncover underlying motivations, beliefs, attitudes and feelings on
a topic. It results in a free exchange of information and enables elicitation of rich and
detailed data that can be used in a later stage of research or qualitative analysis (Gilbert
2001; Malhotra and Birks 2003). Silverman (2000) argues that the term in-depth semistructured interview has become common parlance, as it has the advantages and avoids
the disadvantages of both structured-interview and unstructured interview.
Therefore, taking into consideration the research objectives, and the strengths and
weaknesses of these four qualitative methods, semi-structured in-depth interviews were
employed to extract the interviewees personal opinions and access the interviewees
knowledge, experience and personal perceptions to address the research objectives.
Interview protocol
The protocol included key open-ended interview questions and a number of subject
areas to keep in mind. The interview protocol was prepared with the aim of eliciting
critical incidents. The questions evolved and were formulated based on the literature
review and began with what, how and why. Before the interview, a sample
interview schedule was designed. Brief and clear questions were prepared to allow
lengthy and more detailed descriptions from the respondents. The key questions were
about the factors that they considered important for their port performance; factors that
influenced their port performance, including their regional advantages and
disadvantages, the issues and challenges they were facing and their knowledge on
potential tools to improve the current issues.
Interview conduct
Four pilot interviews were conducted with port stakeholders. The issues that arose
during piloting were discussed and amended to become the final interview questions.
Prior to the interviews, the interviewees were contacted either by email or phone call or
both. The interview questions were sent to the interviewee if requested. All the
interviews were conducted by the researcher herself to build rapport, uncover possible
insights and achieve a standardized approach, in order to reduce or at least systemize
any interviewer effect. Interviewing different port stakeholders aimed to explore the
factors and confirm those factors from the literature. Thus, the interviews improved the
credibility of the research.

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In order to encourage interviewees to express their views openly and freely, interviews
were conducted individually, either in the interviewees company, or at a place agreed
by the researcher and the interviewee. Most interviews were conducted at the
interviewees own office so they did not feel detached from their working environment.
The interviews began with encouraging interviewees to talk about their company and
their job roles to make them feel at ease. This was followed by an introduction to the
research and some background questions to create a friendly atmosphere for free
communication. Then they were motivated to speak out their views about the questions
the researcher was interested in by a semi-structured interview. When asked about port
performance, all interviewees were guided to offer their views on the advantages of
their local port performance by talking about important factors that drive their port
performance. They were also encouraged to address their perceptions on the
disadvantages of their local ports, including the issues and challenges they were facing.
Both the advantages and disadvantages are understood as factors that influence or
determine the regional port performance.
During the interviews, the major questions covering the prepared list of themes were
asked in the same way each time, but the order of questions varied depending on the
flow of the conversation, as suggested by Saunders et al. (2009). Follow-up questions
that might be helpful for obtaining further information were asked to explore some of
the issues under discussion, or to explore emerging issues related to the research
objectives. Most of the interviews lasted for 45-90 minutes. The interviews were
recorded subject to the participants permission. After each interview, data was
transcribed as soon as possible to avoid unnecessary memory loss. Each interview
transcript was reviewed, and the interview schedule was altered or amended based upon
the issues arising in the previous interviews.
Limitations of the interviews
Interviews are very time-consuming and expensive to conduct. One problem the
researcher had to face is that the interviewees were not easily accessible and were
usually busy. It took the researcher about 3 months to complete the Phase 1 interviews.
Sometimes, finding potential interviewees and waiting for their availability was
frustrating. Conducting the interviews entailed many efforts and difficulties, including
walking in heavy snow and darkness and getting lost.

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Some interviewees could only concentrate for 40-50 minutes before being interrupted
by other commitments. Therefore using the given time efficiently and effectively was
crucial to complete the interview questions. Generally speaking, the interviews
proceeded more easily in the Humber than in Xiamen. The Humber interviewees
switched off their mobile phones during the interview or left the phone aside, although
sometimes the interviews were interrupted by phone calls and so forth. In Xiamen, the
interviews were more often interrupted by phone calls and other occurrences. The
interviewees seemed to feel untroubled when the interviews were interrupted, answering
the phone calls in the researchers presence. This might be due to cultural differences.
Lack of generalisability is another limitation for interviews, as explained in Section 4.3.
However, this limitation did not affect the interviews validity.
Despite some frustration and interview limitations, the researcher considered herself
fortunate in being able to obtain a private room to make phone calls for interview
arrangement after a long time negotiation with the administration. She was also
fortunate enough to obtain an office in Xiamen which enabled her to conduct some
interviews within a professional environment. It is appreciated that many interviewees
showed their interest in this research and accordingly offered information to the best of
their knowledge.
The interviews will be presented and analysed in Chapter 5.
4.3.2 Questionnaire survey
The questionnaire is an important instrument of research as a tool for data collection and
measurement (Oppenheim 1992; Gall et al. 2003). The questionnaire survey is a highly
structured data collection technique by which the same set of questions are asked to the
different respondents (Vaus 1996). It provides a relatively simple and straightforward
approach to research of attitudes, values, behaviours, beliefs and motives (Robson
2002). Cross-sectional studies using questionnaires for data collection are often
conducted with the intent of providing a quantitative or numeric description of attitudes
or opinions of a population and generalizing from a sample to a population (Creswell
2009). The questionnaire survey in this research aimed to explore and measure the
respondents attitudes towards the factors influencing port performance, to investigate
differences in importance and performance among the factors, to describe and analyse
differences in factor importance and performance for different ports.

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Using questionnaires has the advantages of being cheap and time saving, being more
objective than other methods such as interviews, and the responses can be collected in a
standardised way (Gall et al. 2003). A questionnaire may be adaptable to collect
generalizable information and its anonymity can encourage frankness when sensitive
areas are involved (Robson 2002). Meanwhile it enables the researchers to obtain
information that is not easy to observe (Remenyi et al. 1998).
Robson (2002) adds four advantages of questionnaires. 1. There is no interviewer bias
caused by unauthorized comments about the research, questions and respondents; 2.
There is no interviewer effect and respondents do not have to relate to characteristics of
the researcher; 3. The researcher being absent, it is easier for respondents to handle
sensitive questions with anonymity; 4. They can be answered at low cost.
Questionnaire construction
The aim of the questionnaire, respondents, the reason for selecting them, time, place and
manner of distribution, and how to analyse the data should be considered when
designing the questionnaire (Vaus 1996). According to the research objectives, 20
factors potentially influencing port performance were extracted from the literature
(Section 3.6). After Phase 1 interviews, 5 factors were deleted. Based on the 15 selected
factors, a 3-page questionnaire survey (Appendix) was constructed, as 3-4 pages are
appropriate for the general population (Neuman 2006). The structure and presentation
aimed to reduce the potential error and increase the potential participation.
No cover page was provided, to save the interviewees time, but a brief introduction to
the research and a statement about anonymity and the sharing of results were given. The
organisations with which the survey is affiliated and supervisors were identified before
the main part, thus adding credibility to the survey. The main part of the survey
consisted of three sections. Section A sought opinions on the importance of the 15
factor. Section B provided concerned performance on the 15 factors for the selected
ports. Section C sought evaluations of the 15 performance factors for other ports with
which the respondents were most familiar. The survey finished with thank you and a
reminder of the return address.
The questions in the questionnaire used a Likert-type scale. This scale is appropriate as
the scales have been found to communicate interval properties to the respondent, and
therefore produce data that can be assumed to be intervally scaled (Easterby-Smith et al.
2008). As discussed by Churchill (1995), there are controversies about the number of
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points to have on a Likert scale. These controversies mainly fall into two categories:
those concerned with the total number of points, and those concerned with the decision
to have an even or odd number of points. An even number of points does not allow the
respondent to identify a middle or neutral position. This research did not design scales
with an even number of points, as this would make it difficult for respondents who held
a neutral position to express their views. Instead, the questionnaire was designed with
an odd number, as it is easy for a respondent with a neutral position while even numbers
try to force respondents to adopt a position.
With regard to the total number of points, it is argued that more points give the
respondent a better selection from which to make a choice. However, it is also argued
that this greater choice may confuse the respondent, and does not necessarily produce
richer data. Therefore, in this research, for balance, a fairly minimalist and simple
approach was taken in that a neutral position was available from within the five point
scales offered. A five-point scale is also found to be the most popular scale.
The language in the questionnaire was tailored to the level of understanding of the
respondents. The choice of words depends on the level of education of the respondents.
The researcher made sure that wording of questions was precise, clear, succinct and
unambiguous (Bell 1993).
As this is a cross-cultural research, the researcher endeavoured to trace the similarities
and differences in the behavioural and attitudinal responses of participants at various
levels in different cultures. Surveys were therefore tailored to the different cultures, for
example by language back-translation, which is addressed in Section 4.5.3.
Questionnaire piloting
Hussey and Hussey (1997) emphasize that a questionnaire should be piloted as fully as
possible before distribution. Hoinville and Jowell (1978) made it further clear that a
good questionnaire is created not only based on the researchers perspective but also on
the process of piloting. The pilot test helps the researcher to see how the questionnaires
will be conducted and how long it takes the respondents to complete them, and to locate
any ambiguities (Aldridge and Levine 2001). Piloting aims to increase the reliability,
validity and practicality of the questionnaire (Oppenheim 1992), identify any further
unexpected problems with the original questionnaire, and refine the questionnaire
(Saunders et al. 2009). Vaus (1996) claims that a good questionnaire involves careful
thinking and goes through evaluation and many pilot tests. Oppenheim (1992) holds a
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similar view that questionnaires have to be created, adapted, fashioned and developed to
maturity after many try-outs to make sure they work as expected.
The questionnaires were piloted with fellow PhD students, academics and port
stakeholders, ten interviewees in the Humber and Xiamen respectively. As China and
the UK are two countries with different cultures, the factors were analysed deeply to see
if the content of the items was basically the same. As questionnaire constructs were
extracted from the literature and confirmed by interviews in both of the port regions,
analyses from pilot questionnaire surveys show that the factors were appropriate for use
in both China and the UK.
Forms of questionnaire survey and distribution
Questionnaire designers are supposed to make an early decision on how to distribute the
questionnaire. There are four main types of surveys: face to face, postal, telephone and
internet, each of which has its own advantages and disadvantages. In the present
research, participants were offered a choice of media, in order to encourage
participation.
Before the distribution, the researcher made phone calls to the potential respondents one
by one, to confirm they were within the right population and establish their intention to
participate, to maximize the response rate. The researcher took note of the potential
respondents preference for mode of completion while she was making the phone calls.
This communication with potential respondents before questionnaire distribution was
found very effective in increasing the response rate.
Emails followed by phone calls were mainly adopted to obtain a higher response rate.
The questionnaire was emailed to the potential respondent with a brief introduction to
the research and questionnaire. Self-completion instruments such as e-mail
questionnaires have the balancing advantage of allowing and encouraging respondents
to complete in their chosen time, significantly reducing intrusiveness (Aldridge and
Levine 2001). Thirty interviewees in the Humber and fifty-two interviewees in Xiamen
requested the researcher to visit their companies and completed the questionnaire faceto-face. The researcher did her best to meet the respondents request and got 82
responses by face-to-face completion. Three companies requested the researcher to fax
the questionnaire.
Post was not adopted as the main response mode due to some disadvantages of postal
administration, such as a longer time to get the feedback, and comparatively lower
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response rate. Even after the phone calls, only two out of twelve postal responses were
received. The respondents might not be fully representative because the characteristics
of non-respondents are unknown. Moreover, the respondents may not treat the
questionnaire seriously (Robson 2002). However, these limitations were tested by nonresponse bias. The test results revealed no response bias based on the independent t-test
and the reliability test result revealed that the responses were highly reliable (chapter 6).
The questionnaires were sent out with envelopes and real stamps rather than a replypaid envelope, because reply-paid envelopes may result in lower response rate due to
being regarded as too official and commercial. With a traditional stamped envelope,
the respondents may be more motivated to reply and they would feel they have been
trusted (Oppenheim 1992). The researcher ensured the return address was on the
envelopes to save the respondents time and energy and show them her sincerity.
Follow-up e-mails/letters were sent and phone calls were made to non-respondents as
reminders at the end of the third, fifth and eighth weeks after the questionnaire
distribution, emphasizing the importance of the research and the value of the
respondents participation, and enclosing a further copy of the questionnaire to increase
the response rate, as suggested by Robson (2002).
Responses to the questionnaire survey will be presented and analysed in Chapter 6.
4.3.3 Other data collection
Considering data accessibility, it is inappropriate to rely on a single source of
information. This research employed the principle of data triangulation to obtain the
data from different sources in investigating particular phenomena. Triangulation is
defined as the combination of methodologies in the research of the same phenomenon
(Denzin 1970). There are four types of triangulation, namely, theoretical triangulation,
method triangulation, data triangulation and investigator triangulation (Easterby-Smith
et al. 2008). The data collected through multiple sources of evidence can triangulate
with each other to reach more valid findings and ensure construct validity. The primary
aims of triangulation are to validate research findings, to present a more complete
overview of social reality, and to reduce bias (Bryman 1988). For this reason, apart
from interviews and questionnaires, documents and direct observation were used to
collect secondary data.
Documents include two categories: specific documents and contextual documents.
Specific documents refer to those directly relevant to the topic of the research, such as
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publications and memoranda. Contextual documents encompass such multiple sources

as company brochures, data from the internet, databases, documentation and reports of
industrial associations, which provide an understanding of the company and port
background and hints of possible broad differences or similarities between two port
regions. This allowed for triangulation of information gathered.
The researcher spent six months (January-March and May-July of 2009) in the two port
regions and conducted some direct observations at the ports to gain an insight into port
performance and understand the different contexts. During her stay on sites, the
researcher formed relationships with port stakeholders on an informal basis. Direct
observations were made throughout the whole data collection process. It should be
noted that observational evidence is useful in providing additional information about the
topic being studied (Yin 2009). The direct observations of interviewees responses and
interview sites, informal discussions with interviewees and reflections were documented
in the field notes, following Miles and Huberman (1994).
It is expected that the multiple sources of evidence could improve the richness of the
data and the credibility of the research. It is also expected that the research objectives be
met by combining the comparative advantages of interviews, field notes and participant
comments into the same research. These supplementary secondary data together with
the interviews and questionnaire surveys corroborated each other to help acquire a more
complete and balanced picture of the ports, and so enhanced the validity of the research
findings (Punch 1998; Bryman and Bell 2007).
4.4 Choice of research locations and interviewees
In order to achieve the research objectives discussed in Chapter 1 and Section 4.1, the
research location, interviewees and number of regions were carefully selected.
4.4.1 Selection of research locations
This research employed purposive sampling for research location selection, as it is
viable for exploratory research purposes, and quick and convenient information can be
attained at less cost, although it does not allow confident generalization to the whole
population (Sekaran and Bougie 2010).
Purposive sampling means selecting cases to research on the basis of their relevance to
the research objectives, theoretical position, and most importantly the explanation or
account that is to be developed (Mason 1996). Purposive sampling strategies were
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designed to enhance understanding of the selected regions and to provide the greatest
insight into the research objectives, which needed sustained access and a high level of
cooperation from the parties involved in the port regions.
Purposive sampling is related to the logic of literal replication, which means that the
research port regions were also selected to predict similar results. This selection requires
prior knowledge of the outcomes, with the inquiry focusing on how and why the
exemplary outcomes might have occurred and hoping for literal replications of these
conditions from case to case (Yin 2009). The research of the selected region is supposed
to predict contrasting or similar results for theoretical replication.
Choice of research locations
Criteria for location selection
Different locations were selected for the empirical research to enable comparison
between the relevant dimensions of different locations. The researcher wished to
discover to what extent results are related to the local context and to what extent they
could be generalized. The location selection was based on four criteria other than port
performance to avoid a focus on success stories, as suggested by De Langen (2003).
The criteria are: Firstly, the ports should be located in different social, economic and
institutional environments. Secondly, research in the location should be feasible in
terms of language and accessibility. Thirdly, the port activities should be important for
the regional economy. This implies that ports in very large cities not be selected, as such
ports cannot account for a large proportion of the regional economy. Lastly, the port
should have competition.
Ports selection
Within the context of China and the UK, as justified in Section 4.2.5, the choice of
fieldwork location was initially targeted at the Humber ports and the Xiamen ports
based on the above criteria. Xiamen, as one of the most important ports in China, is one
of the first four special zones in China. It is targeted to become the regional and
international logistics centre in Southeast China. Xiamen port performance closely
reflects China policies. In 2008, it was ranked 19 in the world in terms of container
TEU (AAPA 2009). In the past 10 to 20 years, Xiamen has valued logistics
development and has been trying to propagate logistics as the new focus for Xiamens
development so that logistics has developed rapidly with the citys economy support.

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Xiamens logistics has contributed to around 9% of Xiamen GDP (Huang 2009). At the
same time, Xiamens logistics is prominent in the Chinese logistics pattern, which can
be recognised in the China Logistics Development Plan- Xiamen was listed as one of
the 17 first class logistics cities; the southeast coastal area with Xiamen as the centre
and between Pearl River Delta and the Yangtze River Delta was positioned as one of the
9 developing areas nationwide. Xiamen port was ranked No. 8 among Chinas ports in
2006 based on comprehensive evaluation on port investment, throughput, capability,
financial statement and natural conditions (Shipping China 2006). From Xiamens
economic development status and its development requirement, it is important to
explore Xiamens port performance further.
The Humber port region was selected because this region owns superb natural assets in
terms of ports. It is host to the largest port region in the country, accounts for 25% of all
international trade and some 16% of UK seaborne trade in 2008, and handles coastal
shipping movements for the UK, according to DFT. In the Humber estuary, the
economy is heavily dependent on the ports sector (Mangan et al. 2008).
The Humber ports are the UKs largest ports complex in terms of tonnage handled: 91
million tons and 6% of UK container TEUs in 2008, over 15% of GB total, the fourth
largest in northern Europe (after Rotterdam, Antwerp and Hamburg), and with potential
for much more shipment (www.dft.com). 71% of tonnage is bulk (such as oil, coal) and
22% is unitised. The ports and waterways in the Yorkshire and Humber Region directly
contributed 250 million and indirectly 500 million and employed 47,000 people in
2009 (www.official-documents.gov.uk).
There are three issues that may lead to increased traffic through the Humber ports.
Firstly, the UK governments Northern Way initiative seeks to reduce the imbalance
in economic development between the South and the North. Greater economic activity
in northern England may lead to higher traffic through the Humber ports. Secondly,
road freight transport has already aroused concern about its social and environmental
impact, which may bring more pressure on road transport and will increase sea transport.
Currently, the majority of UK containers come and go via the southern ports, for
example, Felixstowe takes about 38% (3m TEUs over 8m TEU) of all UK container
TEUs, while Southampton takes about 18% of UK containers. As 60% of them are for
customers in the northern or Midlands areas, they are transported by road in UK. These
containers may be driven to transit at the Humber ports due to congestion of the
southern ports. Thirdly, Pettit and Beresford (2007) analysed container distribution
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patterns in the UK and concluded that it may be cheaper to serve Northern England via
feedering from major ports in the European continent, such as Rotterdam or Antwerp,
into a gateway such as the Humber, rather than via a mainline direct call at Felixstowe
or Southampton.
IBM Global Business Services (2006) made an assessment of the Hull and Humber
region, and identified that value added logistics is one of the three target sectors for
regional economic activity. If the Humber ports can vigorously develop value added
logistics, the advantages of the Humber ports would become prominent, given the
drivers mentioned earlier. The Humber ports used to be prosperous. The position of
Humber ports has declined. To match the Northern Way initiative, the Humber ports
need to restore their past glory. This research sought to discover the reasons for the
decline and try to identify factors influencing port performance and improve port
performance of the Humber.
Both the Humber ports and Xiamen ports are crucially important for their regional
economies. The port throughput, population, port employment and other relevant port
statistics are presented in Table 4.5:
Table 4. 5 Characteristics of the Humber and Xiamen ports
Port

Volume throughput

Container
throughput

The population in
2008

Employment

Employment %
of the region

Contribution
to GDP

The Humber

81,057,000
2007)

19,146 (dft,
2007)

912,200
(Humberep.co.uk)

361,694
(2008,
Humbersep.co.uk)

16.2% of Y&H

16% of Y&H

Xiamen

97,000,000(Xiame
n Statistics Bureau,
2008)

5,034,622
(AAPA,
2009)

2,520,000(Xiamen
Statistics Bureau)

61,170 (Xiamen
Statistics Bureau)

8.7% of Xiamen
employees

9%

(dft,

In terms of location, both the Humber and Xiamen share some similarities. They are
both located midway along the countrys east coast. Xiamen is a Taiwan Strait inlet
facing Taiwan while the Humber is a North Sea inlet facing the European continent.
Both are the major port estuary in their own country. The Humber faces continental
Europe to the east while Xiamen faces Taiwan to the east. However, there are some
differences between the locations. The UK has a large number of small-scale ports
while China has a number of large-scale ports. Xiamens water depth is deeper than that
of the Humber. The Humber is a short seaport due to the expansion of EU. It is
supposed to be a feeder port to Rotterdam and Antwerp in Europe. However, Xiamen is
targeted to become a regional transhipment port, although it used to be a feeder port to
Kaohsiung and HongKong. Xiamen is in the special economic zone. Its port
performance is strongly related to the Chinese policy. With the economic decline of
Taiwan, Kaohsiung may become a feeder port of Xiamen. Besides Kaohsiung, Xiamen
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already has some feeder ports such as Zhangzhou, Quanzhou, Sanming, Longyan and
sometimes Fuzhou.
Both the Humber and Xiamen are in very different contexts and they allow different
lessons to be learnt. In the Humbers context of UK, the government and port managers
have clear responsibilities and positions for port construction and investment. They do
not heavily intervene in the port market. New projects cannot be carried out without
favourable public opinion. For example, the government approval process for the
expansion of Felixstowe has lasted over 10 years, as the public are concerned about
environmental issues. In contrast, in Xiamens context of China, the roles of
government and port managers have not been thoroughly clarified. Decisions are more
bureaucratic with less concern for public opinion. For new port projects, the leaders will
play an important role in the approval, which may give rise to resource waste and
sacrifice of the environment, which will be further discussed in Chapter 5.
This section has explained that selection of the Humber ports and Xiamen ports is in
line with the criteria by De Langen (2003) in terms of port selection. The Humber and
Xiamen have some useful experiences or lessons to learn from each other. Finding out
the differences in operations between them may benefit their port development;
discovering the similarities may develop the theory of port performance.
4.4.2 Selection of interviewees
Sampling procedure and sampling frame
Sampling is the process of choosing samples from which data is collected that is
potentially relevant to the research being conducted (Aldridge and Levine 2001).
Sample selection is vitally important, considering cost, time, feasibility and quality
(Lynn 2002). The ultimate purpose of survey sampling is to select a set of members
from a population so that a description of those members accurately describes the whole
population from which they are drawn (Vaus 1996). There are two kinds of sampling:
probability sampling (or random) and non-probability sampling (Remenyi et al. 1998).
Which way to choose depends on the researchers aim. Some researchers select samples
to provide the maximum theoretical understanding, while others are concerned about a
sample to represent the whole population (Arber 1993). In quantitative research, the
sample should be representative of the population from which it is drawn (Oppenheim
1992). Probability sampling provides a method to meet this criterion. Random selection

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enables researchers to access a body of probability theory that provides the basis for the
estimates of population parameters and estimates of error (Gall et al. 2003).
The researcher tried to make the samples sufficiently accurate, free from omissions and
duplications and up to date, as advised by Saunders et al. (2009). In order to ensure that
the selected samples were as representative as possible, the researcher adopted a
disproportionate stratified random sampling technique1, which gives a greater degree of
representation and decreases the probable sampling error that would occur with a simple
random sample of the same size (Vaus 1996).
Specifically, the sampling frame of port stakeholders was categorised into five groups
based on Murphy et al. (1992), Murphy and Daley (1994) and Notteboom and
Winkelmans (2001) who identify and categorise port stakeholders into shippers,
forwarders, shipping lines and port managers. Bichou and Gray (2004) find that
shipping lines, freight forwarders, shippers, inland transport providers and port
operators are the important port customers/suppliers. They also note that ports have
diversified clients and no client holds a dominant role.
The current researcher prefers to use the term consignors/consignees rather than
shippers, to refer to local port related manufacturing industries, retailers and distributors,
because apart from shippers, receivers (consignees) are also important port customers.
Transport operators (railways, truckers), port labour and stevedores, warehousing
providers and vessel/cargo agencies/forwarders are referred to as port service providers.
Port managers refer to port authorities and port operators. Local environmental groups,
local residents, local/regional and national government and government agencies,
academic professionals, consultants are considered as one group of port stakeholders other port stakeholders. Hence, in this research, port stakeholders are categorised into
five groups: consignors/consignees, PSPs, carriers, port managers and other port
stakeholders.
The aim in selecting these broad categories of questionnaire respondents was to cover
port stakeholders as comprehensively as possible. Certain samples were randomly
selected from each of these groups, not by equal number but in different proportions as
their sample sizes vary from port to port. With this technique, the target groups that

Stratified random sampling is a procedure which first categorises a population into subgroups and then
randomly selects from each subgroup until a desired number is reached, either proportionately or
disproportionately, from each subgroup- www.setda.org/web/guest/glossary.

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were closely related to ports were identified on the basis of literature review, previous
surveys, interviews and networking with professional and trade bodies. The reason for
collecting data from various groups is that each group of port stakeholders has a distinct
interest and role in the global logistics pipeline (Murphy and Daley 1994).
Selection of interview interviewees
Sample selection refers to a more general process of focusing on a portion of the
population. Eisenhardt (1989) claims that a key approach to limit the bias of
interviewees is using numerous and highly knowledgeable interviewees who view the
focal phenomena from diverse perspectives. Good interviewees are those who not only
have knowledge and experience the researcher requires but also are able to reflect, have
the time to participate, and are willing to participate (Morse 1994). The quality of port
interviewees is crucial for the quality of the outcomes of the interviews in the empirical
research. That is why the interviewees were carefully selected to avoid bias.
Empirical research which attempts to improve strategy is likely to benefit from the
involvement of managers who actually participate in their organisations strategy
formulation. This implies that an appropriate methodology should be based on groups of
managers who have the experience and expertise to understand the products and
services of their organisations (Slack 1994).
As qualitative research does not aim to draw statistical inference, purposive sampling is
often employed in the investigation (Sekaran and Bougie 2010). In this research, the
interviewees were purposively selected on the basis of in-depth knowledge and
expertise of performance in the port. Three criteria were used for interviewee selection:
job position, working experience in the port sector and involvement in port management.
Experts in various high positions from five key port stakeholders were interviewed,
which is a very important way to validate the findings. This means that qualitative data
from interviews for this research was collected using a key interviewee approach. The
technique of snowball sampling was also employed to help with the selection of
appropriate interviewees.
As this research was conducted on the basis of mixed methods, the large number of
interviewees that are needed in quantitative research was not a central issue for the
qualitative research (Malhotra and Birks 2003). The number of interviews depends on
when the researcher feels he/she has reached a point of theoretical saturation or stability
(Sekaran and Bougie 2010), and no new information or major points emerge from the
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interviews (Patton 2002). Perry (1998) indicates that 35-50 is the appropriate number of
interviews for a doctoral research. Based on the above arguments, forty interviews in
Phase 1 from January to March of 2009 were conducted (Section 4.3.4). The detailed
profile of interviewees is given in Table 4.6.
Table 4. 6 Profile of interview participants
Column

Mfg/retailer
/distributor

PSP

Shipping
line

Port
manager

Other
stakeholder

Director

Manager

Sub-total

Humber

10

10

20

Xiamen

10

10

20

Total

10

20

20

40

Selection of questionnaire respondents

As discussed for the selection of interview interviewees, the selection of questionnaire
respondents should also apply the same criteria: experts from various port stakeholders
to provide invaluable data and avoid respondents bias, also using a key interviewee
approach. Therefore, the questionnaire surveys were sent to top management of five
groups of port stakeholders.
For the number of questionnaire respondents, Sekaran and Bougie (2010) propose that
sample sizes of 30-500 are appropriate for most research. The sample size can be
flexible, given the uncertainties (e.g. resources, time, and funds limitation) of the
proposed research under specific situations. For this research, the questionnaire sample
size was decided by referring to the table provided by Sekaran (1970; 2000) that offers
general scientific guidelines for sample size decisions. The number of the main port
stakeholders in the Humber was estimated to be around 400 and that in Xiamen was
estimated to be around 1300. According to Sekaran and Bougie (2010), when the
population size is 400, the sample size should be 196; when the population size is 1300,
the sample size should be 297. Therefore, 200 questionnaires in the Humber and 300
questionnaires in Xiamen were distributed.
A random sampling frame of 500 companies was then selected to reflect the shares of
five different types of organisations involved in port activities. Then 500 specialists who
had rich experience with ports and who knew ports well (one from each company) were
drawn from the population. The numbers of respondents in the five sample categories
were not equal because the populations were not equal. As port stakeholders are not
defined clearly and in detail, and the numbers of port stakeholders were not available in
the public statistics, the researcher had to estimate the number of main port stakeholders
who would be representative of the ports in the two regions, based on the interviews
with port managers.
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As indicated earlier, the questionnaire survey was conducted in the Humber estuary
(UK) and Xiamen (China) from May to July of 2009. In the UK, the first company list
was obtained from the port authority when interviews were conducted with ABP, the
regional port authority, port owner and sometimes a port operator as well. The ABP
handbook provides a list of the regional port stakeholders such as port users and port
service providers. The second list was obtained from the Chamber of Commerce, which
includes the regional importers and exporters that are port end users. Then some
association members such as members in NETTA (North East Timber Trading
Association), Team Humber Marine Alliance, Yorkshire Forward (the Regional
Development Agency), Humber World Trade Centre, the local City Councils, UK Trade
and Industry, BIFA-British International Freight Association, RHA (Road Haulage
Association) and British Services (Hull Shipping Services) were contacted to try to find
appropriate respondents. The lists provided the sampling frame which represents all the
elements in the population from which the sample is drawn (Sekaran and Bougie 2010).
200 companies were selected from these lists by means of stratified random sampling.
In Xiamen, the Xiamen Logistics Association and Xiamen Industrial and Commercial
Administrative Bureau provided the researcher with company lists, which included all
organisations involved in Xiamen ports and logistics. The list of Xiamen University
Alumni also helped the researcher to select some interviewees who were working for
the ports or port related companies. Based on these lists, the researcher selected 300
companies by stratified sampling techniques. Table 4.7 shows the company profile for
questionnaire distribution.
Table 4. 7 Questionnaire distribution profile
Region

The Humber
Valid
%
% over over
distr.
resp.
41.7
27.2
48.3
31.5

27.2
58.7

#
of
Survey
Distrib
90
65

# of
valid
resp.
26
33

Xiamen
Valid
%
distr.
28.9
50.8

%
over
resp.
23.2
29.5

Cum.
%

Company type

# of
Distr

Cargo interests
LSPs

60
60

# of
valid
resp.
25
29

Shipping lines

25

12

48.0

13.0

71.7

50

20

40.0

17.9

70.5

Port managers
Others

50
5

24
2

48.0
40.0

26.1
2.2

97.8
100

80
15

25
8

31.3
53.3

22.3
7.1

92.9
100

Total

200

92

46.0

100
Selfcom.

100

300

162*

54.0

100

62

Face-to-face

100
Selfcom.

Res. method
Face-to-face
* 50 of them are missing data.

30

52

Cum.
%
23.2
52.7

Total
#
(HB/
XM)
51

% of
resp.

62
32

30.4
15.7

49

24

10

4.9
50.8

25

110

In the Humber, 92 valid responses (valid response rate=46%) were received, while in
Xiamen 162 valid responses (valid response rate=54%) were received. This response
rate was satisfactory as the usual questionnaire survey response rate in logistics and
supply chain management is between 10-30%. Aryees (2005) PhD thesis on supply
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chain integration performance had a response rate of 12%; Adeleyes (2002) PhD thesis
on manufacturing agility had a response rate of 18.3%, Hoeks (2001) journal paper on
the contribution of performance measurement to the expansion of third party logistics
alliances in the supply chain had a response rate of 27%, Gordon and Sohals (2001)
research on assessing manufacturing plant competitiveness had a response rate of 26%.
Lirns (2004) research on port selection had a very high response rate of 90% from
global carriers, but its sample frame was small (only 20). Murphy et al. (1991) achieved
a response rate of 21.1% with an effective sample size of 383 (industrial companies in
the US) and 81 useable responses for their survey on international water transportation.
It should be acknowledged that the results represent the knowledge and interpretations
of individuals from the different port stakeholders rather than their company views,
although this research has tried to select the respondents to be as representative as
possible of their companies. Interviewees for both interviews and questionnaires were
considered adequately qualified to answer the questions from the questionnaires and
interviews. This approach was considered appropriate for the population and was
considered adequate to produce reliable and valid data.
4.5 Data analysis and interpretation
Once the selected research methods have been applied, it is necessary to select and
interpret data, and then integrate all the data into a rich descriptive report (Strauss and
Corbin 1998). The data gathered from the real world can be analysed by quantitative
analysis, qualitative analysis or a combined analysis to address the research objectives.
4.5.1 Qualitative data analysis
This section explains how the process of data analysis was conducted and how the
findings came out from the qualitative data by interviews. For qualitative data analysis,
the researcher adopted an interpretivist philosophy (Gibbs 2002), which is a continuous
and interactive process. A number of approaches to analysing and interpreting
qualitative data have been proposed by researchers (Punch 1998; Silverman 2000), and
there is no single standardized and commonly agreed approach.
However, despite the diverse approaches, the process of qualitative data analysis is
fundamentally a non-mathematical analytical procedure to examine the meaning of
peoples words and actions (Maykut and Morehouse 1994). The process of qualitative
data analysis is presented in Figure 4.3.
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The researcher employed thematic analysis for the qualitative data, following Miles and
Huberman (1994) who suggest a three-stage process of qualitative data analysis: data
reduction, data display and conclusion drawing and verification.
Data collection
by interviews (recorded)

Verbatim data transcription

Careful and repeated
reading line by line

Careful and repeated

reading line by line
Data reduction by coding,
identifying
themes
and
categorization

Iteration of data reduction

& data display

Iteration of data reduction

& data display
Data display by theme
and pattern extracted
Reflection

Reflection
Conclusion drawing and
verification
Compare
&contrast

Compare
&contrast

Report writing

Figure 4. 3 Process of qualitative data analysis

Data reduction
Data reduction (Stage 1) refers to the process of selecting, focusing, simplifying,
abstracting and transforming the data that appear in written-up field notes or transcripts
(Miles and Huberman 1994). The qualitative data from interviews were analysed
manually. The researcher printed the full verbatim interview transcripts together and
read them several times to familiarise herself with the contents.
The reduction activities consist of coding, writing summaries, and identifying themes
and clusters (Miles and Huberman 1994). The researcher wrote the codes against lines
and paragraphs. Notes were taken in the margin. Then the transcripts and notes were
selected, focused and simplified based on the research objectives. Data reduction
happened during and after the data collection until final conclusions were drawn and
verified. This approach refines and organises the data in preparation for conclusion
drawing and verification.
Codes are efficient data labelling and data-retrieval devices and they can empower and
speed up analysis (Miles and Huberman 1994). The codes came from the research
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objectives, problem areas and key factors that the researcher brought to the research
from the extant literature. A coding list was then developed. After data coding, the
codes were categorised according to common characteristics, which produced the
cluster contextual variables. Based on the summary, themes were constructed. The main
themes of the responses were collected and arranged into categories, and then
interpreted, following the research objectives.
Data displays
Data display (Stage 2) allows data to be organised and condensed in a way that permits
conclusion drawing. The purpose is to reduce complex information into selective and
simplified or easily understood configurations. Extended text, matrices, graphs and
charts are often employed for data displays to justify the final conclusions (Miles and
Huberman 1994). They help the researcher with themes and patterns for further analysis
and to derive further conclusions. In the current research, the researcher displayed the
codes in diagrams to identify the themes and patterns. Then the frequency was tabulated,
the complexity was examined and the information was summarised in order. In practice,
data reduction and data display were conducted iteratively throughout the data analysis.
The iteration reduced the data because it involved data selection, focusing,
simplification, abstraction and transformation. The analysis proceeded in an iterative
manner, simultaneously with data collection, interpretation, and narrative report writing.
Conclusion drawing and verification
Stage 3 analysis was conclusion drawing and verification. In order to provide solid
proof and valuable insights into the main issues investigated, the presentation was
focused on maintaining the personal meanings expressed by the interviewees, and on
locating these personal meanings within the different port contexts. The researcher did
not draw conclusions until the data collection was over and verified as plausible and
valid, because the researcher was aware that cause and effects might not be the same as
the research progressed. Moreover, the researcher was aware that moving too soon to
conclusion may result in premature conclusions (Miles and Huberman 1994). This
argument is consistent with Thompson et al. (1994) who claim that a process of iteration
is necessary because the initial understandings of a text can be modified and improved
as later readings provide a more developed sense of the whole text, and a holistic
understanding of a text would be developed over time.
This research therefore followed a similar part-to-whole and whole-to-part mode of
interpretation to that suggested by Thompson et al. (1989). Each interview was treated
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as a part of the whole qualitative data. As the data were collected from two different
regions, separate analysis was conducted for each port region first, and then followed by
combined analysis. The cross region combined analysis aimed to explore patterns across
regions, enhance generalisability, and deepen understanding and explanation.
The whole process of analysis was repeated as many times as it was needed. The
iterative process helped in gradually verifying, modifying and refining the research
results until finally an explicit and grounded conclusion was reached and verified.
Finally, a report of the qualitative data analysis was written based on findings from the
whole analysis process. This will be presented in Chapter 5.
4.5.2 Quantitative data analysis
Computer friendly pre-codes were added in the notebook. All or most of the items were
pre-coded questions to simplify and speed up the data process by computer based on
Simmons (2001). As the questionnaire was well constructed, the time needed to code
and analyse responses was short, particularly as computing coding or analysis is
available today (Robson 2002). For the data collected from the questionnaire survey, the
data entry and data coding were input into computer.
All data analyses were conducted with the Statistical Package for the Social Sciences
(SPSS) version 17. Data analysis involved tests of normality, selecting statistical
techniques, preparation of working data files, and computing statistics and relevant
indicators to detect underlying relationships among variables. Internal consistency
reliability was evaluated by computing Cronbachs . Then three statistics (means,
standard deviations and frequencies) were calculated to further aid in interpreting the
data.
To reduce the number of factors, factor analysis was conducted to draw out the main
factors (which are defined as aggregate factors2 in this research, or A-factor for short)
that influence port performance. Subject to the results of factor analysis, comparative
analysis was conducted. Specifically, an independent-samples t-test was used when two
regions were compared; paired-samples t-test was used to compare mean scores with

Aggregate factors, A-Factor for short in this thesis, refer to the factors extracted by factor analysis.
This term is used to distinguish an extracted factor from a questionnaire factor to avoid confusion. A
questionnaire factor refers to the factors selected from the literature and first phase interview. If not
particularly explained, factors in this thesis refer to questionnaire factors. A factor here refers to an
element which enters into the composition of anything; a circumstance, fact, or influence which tends to
produce a result, according to the Oxford English Dictionary.

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matched pairs for the same group of people: the Humber (importance vs. performance),
Xiamen (importance vs. performance), the Humber (performance vs. other ports
performance), Xiamen (performance vs. other ports performance), importance
(Humber vs. Xiamen), performance (Humber vs. Xiamen), performance difference
(Humber vs. Xiamen). Kruskal-Willis H Test was conducted to detect whether there
were significant differences among the company groups, as the number of groups is
more than two, and the number of respondents were not equal.
IPA was employed. IPA offers a number of advantages for evaluating customer
acceptance of a service strategy and has been a popular tool for understanding customer
satisfaction and prioritizing service quality improvement (Bacon 2003). As this is an
important analytic technique in this research, it is worth addressing in a separate section
of 4.6.
4.5.3 Validity and reliability
Reliability is basically referred to as consistency (Punch, 1998) and repeatability of the
research results (Bryman and Bell 2007). Validity refers to the extent to which a test
measures what it claims to measure (Antonius 2003), or the extent to which the research
findings represent accurately what is actually happening in the situation (Collis and
Hussey 2003). Yin (2009) states that four tests, namely construct validity, internal
validity, external validity (the results should be applicable to external context) and
reliability (if identical results are generated based on the same research process), have
been commonly used to establish the quality of any empirical social research. Similarly,
Bryman and Bell (2007) note that the quality of an empirical study depends on the
validity and reliability of items. Replication is often used to test the reliability of survey
results (Collis and Hussey 2003). Face validity is the most common validity, which
refers to the assurance that the tests or measures used by the researcher actually do
measure or represent what they are supposed to (Collis and Hussey 2003). Construct
validity is also important for business research.
For the interview data, the validity and reliability were realised by sending back the
transcriptions to the respective participants for their endorsement. A few participants
made amendments involving additions or omissions. For interview process validity, a
well-designed interview protocol was followed during the interviews to enhance
validity. For example, the key interviewees were asked to review the draft report to see

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if they agreed with what was in the report or not, in order to validate the interview
content.
Concerning questionnaire validity and reliability, to ensure the analysis and results
represent the views of the respondents, the reliability and validity of the survey should
be tested before describing the statistics. Besides reviewing literature for evidence of
reliability and validity among the questionnaire components, a pilot test was conducted
and a reliability test was conducted, which showed the Cronbachs was high, which
indicated high internal consistency of the responses (Pallant 2007).
For the construct validity of the questionnaire, the researcher relied on an in-depth
review of relevant literature. In the process of determining the questionnaire items, the
content validity was ensured, which was an important measure to ensure a survey
instruments accuracy. As item content validity provides a solid foundation on which to
methodologically and rigorously assess a survey instruments validity (Lirn 2003), the
content validity of the questionnaire used in this research was tested through a literature
review and interviews with port stakeholders. The literature and previous surveys
referred to when constructing the questionnaire are Slack (1985), Murphy (1991, 1992),
UNCTAD (1992), Notteboom and Winkelmans (2001), Lirn (2003), Lirn (2004),
Tongzon (2004; 2007), Cullinane et al. (2005), Yeo et al. (2008), and Lam and Yap
(2008). Academics and experts in ports were also approached to check the items for the
content validity during pilot tests. The interviews with academics and port experts
resulted in amendment of some items. The items after amendment were input to the
final questionnaire survey to ensure the construct validity.
For the entire data collection fieldwork, the construct validity of methods was achieved
by using multiple sources of evidence, namely, interviews, questionnaire, observation
and documentation. Convergent validity and discriminant validity are two subcategories
of construct validity, which will be reflected in Chapter 6 for the data analysis. In
addition, back-translation of the questionnaire was employed to ensure the language
was equivalent to the original copy.
The current research was undertaken in different countries. This cross-cultural research
involved two different languages: English and Chinese. The questionnaire was
originally designed in English. It was first translated from English to Chinese by a local
expert in Xiamen. Then another bi-linguist translated the questionnaire from Chinese
back to English. The process of back translation aimed to ensure vocabulary
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equivalence, as suggested by Sekaran and Burgie (2010). For the interview questions,
the same procedure was undertaken to ensure equivalence. Quotations from the
interviewees were also selectively back- translated by an academic and compared with
the original Chinese transcript. Since Chinese was used in Xiamen, the transcripts were
selectively back-translated by an expert to compare with the original for data validity.
As this is a cross-cultural research, attention was paid to two issues. Firstly, to ensure
response equivalence, uniform data collection procedures were adopted in the different
cultures. As a bi-linguist, the researcher herself collected the data by identical methods
from the research introduction, introduction of herself as the researcher, task
instructions, questionnaire administration, and interview process to closing remarks.
Secondly, the time frame for the data collection was controlled to within 4 months each
for interview and questionnaire data collection from both countries. This is an
acceptable time frame recommended by Sekaran and Burgie (2010) to avoid much
change taking place during the data collection.
Lastly, mixed methods and data triangulation also enhance the reliability and credibility
of this research in terms of data sources and research methods.
4.6 Importance-performance analysis
This section will explain how the factors can be analysed by employing the method of
IPA in empirical research. It will review the literature on IPA, including the origin of
this tool, the research areas in which this approach has been employed and the
development of IPA. The traditional and revised models of IPA will then be reviewed to
justify why it was selected as an effective tool for analysing the factors from Section 3.5.
4.6.1 Origin of IPA
Martilla and James (1977) initiated the simple technique of IPA to identify key
attributes for the development of an automobile marketing programme. They put mean
customer ratings of each attributes performance in quantization value on the horizontal
axis, and then put mean customer ratings of each attributes importance in quantization
value on the vertical axis. A two-dimensional graph, with the mean importance and
performance scale constituting the two axes, was constructed. The values for each
attribute were plotted as points on the importance-performance grid. The plots on the
grid indicated the appropriate strategy for each attribute. In this technique, the attributes

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are plotted against each other and the resulting importance-performance space is divided

High

Concentrate here

Low importance

into four quadrants, as shown in Figure 4.4.

Low Priority

Low

Keep up the good work

Possible overkill

performance

High

Figure 4. 4 Importance-performance grid

Source: Martilla and James (1977)

Martilla and James (1977) interpret the quadrants into concentrate here (high
importance with poor performance, items in this quadrant have high priority for the
improvement of service quality), keep up the good work (high importance with good
performance), low priority for actions (low importance with poor performance) and
possible overkill (low importance but good performance, which might be considered
as a waste).
4.6.2 Employment of IPA
Ever since Martilla and James (1977) demonstrated the technique of IPA, it has been
widely used for prioritising service improvements. It has attracted the interest of various
academics and researchers so that different IPA variations have emerged over the years.
Table 4.8 presents some of the areas of interest and application of IPA.
IPA has been applied in different research areas, such as manufacturing (Platts and
Gregory 1992), operations and engineer services (Slack 1994), education services (Ford
et al. 1999), hospitals (Yavas and Shemwell, 2001), professional associations (Johns
2001), freight transportation (Mangan et al. 2002), financial service provider of banks
(Yeo 2003), highway transportation (Huang et al. 2006), human resources (Eskildsen
and Kristensen 2006), hotels (Deng 2008), retailers (Shieh and Wu 2009) and tourism
(Lai and To 2010). Brooks et al. (2010) used IPA to examine port users evaluation of
port effectiveness. However, being so important and popular, IPA has not been applied
to the port sector to identify factors influencing port performance yet.

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Table 4. 8 Literature on importance and performance analysis

Author

Research area

Year

#
of
factors

Response(rate)

Imp-perf/perf dif.

Martilla and James

automobile

1977

14

44.80%

imp-perf

Crompton and Duray

profile market

1985

28

97%

imp-perf

Slack

operations& engineer service

1994

4 focus group

imp-perf dif.

Ford et al.

Education service marketing

1999

22

68.2%+focus group

imp-perf dif.

Johns

professional association

2001

22

22%

imp-perf dif.

Yavas and Shemwell

medical service-hospital

2001

15

72.70%

imp-perf relative

Slack et al.

operations

2001

xx

imp-perf dif.

Mangan et al.

freight transportation

2002

15

xx

imp-perf dif.

Matzler et al.

bank

2003

12

153 responses

imp-perf

Bacon

15 datasets

2003

2nd hand data

imp-perf

Yeo

banks-financial service

2003

17

31.20%

imp-perf dif.

Huang et al.

highway transportation

2006

24

98.40%

imp-perf

Eskildsen and Kristensen

job satisfaction

2006

30

20%

imp-perf

Deng et al. Taiwan

hot spring hotel case research

2008

20

412 responses

imp-perf

Siniscalchi et al.

training

2008

18

xx

imp-perf

Pezeshki et al.

mobile communication industry

2009

74.40%

Lin et al.

human resource

2009

52

82%

Riviezzo et al.

service management

2009

20

275 responses

imp-perf
imp-perf./gap
analysis
imp-perf

Shieh and Wu

retailer

2009

18

2x150 responses

imp-perf

Lai and To

tourism

2010

28

23.30%

imp-perf

4.6.3 Development of IPA

Traditional IPA
As reviewed above, after Martilla and James (1977), quite a few other studies have
followed the same approach of analysing attribute importance and attribute performance
with self-stated measures, which is known as traditional IPA. In these traditional IPA
studies, the quadrant values are from factor importance and factor performance, as the
authors find it more meaningful to research the data of importance and performance
simultaneously than only to research the data of importance or performance separately.
Aaker and Day (2004) reported the importance-performance model. Traditionally, the
four-quadrant matrix can identify areas needing improvement and areas of effective
performance (Shieh and Wu 2009).
Deng et al. (2008b) argue that the traditional IPA has two implicit assumptions: 1.
Factor importance and factor performance are two independent variables. 2. The
relationship between factor importance and factor performance is linear and
symmetrical. They claim that the two assumptions are wrong, because: 1. The two
variables are not independent. 2. The authors note that the relationship between them is
not linear but causal (Matzler et al. 2004). This implies that the traditional IPA approach
can be misleading (Bacon 2003; Matzler et al. 2004). Some researchers have tried to
revise the traditional IPA.

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Revised IPA by gap analysis

Apart from plotting items on a four-quadrant matrix, gap analysis is used to
simultaneously consider importance and performance and identify the areas for
improvement. There are two types of gap analysis in IPA.
The first type of gap is measured as performance minus importance. Platts and Gregory
(1992) conducted IPA by employing the rating of importance and performance
difference in manufacturing for strategy formulation. Ainin and Hisham (2008) applied
the IPA to information systems in Malaysia. They indicated that the gap between the
importance and performance implies the opportunities for improvement and guides the
prioritization of resources and management intervention. Ford et al. (1999) developed a
gap-based approach that compared importance with performance to implicitly set
improvement priorities. They regarded the gap of performance minus importance as the
room to improve and applied IPA in the educational service. Two case studies were
undertaken in New Zealand and the USA to develop a strategic tool for education
service market improvement. Two important contributions they made to this research: 1.
They identified the problematic attributes by the importance-performance difference. If
the mean performance minus mean importance is negative, the attribute shows a
potential problem. The bigger the difference is, the bigger the problem is with that
attribute. 2. They identified a significantly different factor structure between the two
countries, although they investigated the same attributes. The results suggest that trying
to develop a single model of important facts to apply in a cross-cultural context might
be a mistake. Two years later, Johns (2001) noted that quality= performance score
expectations score, which is similar to the view of Ford et al. (1999).
The second type of gap is measured as focal performance minus competitor or bench
markers performance. The competitors performance is treated as an explicit
benchmark by which to judge the operations performance. The performance difference
(performance) is treated as the gap of the focal organisation to improve. This is
different from traditional IPA that only considers focal performance.
Yavas and Shemwell (2001) extended the traditional IPA model by integrating
competitors performance. They state that a respondents index score for a given
attribute is equal to his evaluation of the importance of an attribute times the difference
between his assessment of the competitor and the focal object performance. The X axis
presents performance from low/left to high/right; the Y axis presents the relative
performance score. Those means that are significantly higher than the grand means
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(mean importance rating for all the factors taken collectively) are considered as salient.
In their modified IPA matrix, if both performance and relative performance index are
high, the activity is a competitive edge and should be keep up the good work; if both
are low, there is a competitive disadvantage, a red alert is given and urgent actions
should be taken; if performance is high and importance is low, that activity falls in the
quadrant of vulnerability and competitive watch; if performance is low and importance
is high, it indicates false security and opportunity alert. The entity needs to stay alert to
actions.
Other researchers and authors such as Slack (1994), Johns (2001), Yeo (2003), and Lin
et al. (2009) hold a similar view that traditional IPA should be integrated with gap
analysis. They understand that service quality is the degree of discrepancy between
customers expectations (importance) and perceptions (performance) of the service. The
gap between the competitors performance and focal performance needs improving, if
the result of competitor performance minus focal performance is positive. The bigger
the gap is, the more effort is needed to improve the focal performance.
Shieh and Wu (2009) apply IPA to the retail sector to examine how services in
convenience stores could be improved. They evaluate the performance by the mean
value and evaluate importance by the variance-based methods. The basic idea of
variance-based importance is that the larger variance a variable has in its ratings, the
more important the variable is. This method is particularly useful when the importance
is not directly available from the survey.
Re-dividing the quadrants of the IPA model
Slack (1994) and Slack et al. (2001) analyse the relationship between importance and
performance and modify the traditional IPA to reflect managers perceived relationships
between importance, performance and priority for improvement. They note that
derivation of a ranked list of competitive factors is crucial for a business operations
strategy and the importance-performance matrix is important for both internal and
external service improvement. They segregate the importance-performance matrix into
four zones instead of four quadrants, namely, the appropriate zone, the improve
zone, the urgent action zone and the excess zone, which implies very different
strategies. The four zones are separated by three lines: lower bound of acceptability,
distinction and approximate boundary. The managers views of better than competitors
are treated as the boundary line of acceptability, which distinguishes what is acceptable
performance and what is unacceptable performance. The authors consider that
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importance and performance act together to determine priority for improvement,

as there are some interesting indications of the links between importance, performance
and perceived improvement priority. The priority which managers give to improving
particular competitive criteria depends on their importance, and managers are concerned
only with performance levels that are clearly below those of their competitors.
Slack (1994) argues that the 2x2 zoning does not hold for intermediate points and
suggests a 9x9 zoning for the importance-performance relationship analysis. The 9x9
format (Figure 4.5) is quite different from the 2x2 format because the boundary lines are
quite different, although it follows the same intuitively acceptable rationale. The
boundary might be low in practice as managers would tolerate poor performance if that
activity is relatively unimportant (8 or 9 on the importance scale), as shown in the area
of appropriate.

Figure 4. 5 Importance-performance matrix zones

(Source: Slack 1994)

The minimum boundary line of acceptability (line AB) is the competitors performance.
Above it is appropriate except factors of excess (separated by line EF between
appropriate and too good) that are over-performed with low importance. Below the
boundary line are factors that need improving except the factors of urgent action
(separated by distinction line CD between urgent priority zone and less urgent
improvement zone) that are very important with very low performance. The short-term
objective is to raise the performance of urgent action up to the improve zone.
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The 9x9 tool is theoretically better than the 2x2 matrix as it distinguishes the grid more
concisely. Low performance is tolerable when the importance is low, while performance
needs improving even though the performance is not poor, as the benchmark is
competitors performance. However, the boundary line between acceptable and
unacceptable is blurred and difficult to define, as managers views are quite subjective
and competitors performance is hard to define. This tool is difficult to employ
practically. In the current research, as the competitors were hard to define, it was more
difficult and not possible to define an accurate value for the boundary line of AB. For
lines CD and EF, it is even more difficult to get the value to form the lines. Hence this
research did not employ the 9x9 formats with four zones.
The factors with high importance and a big gap of performance difference are called
salient factors by Brooks (2000). Mangan et al (2002) identify the salient factors on
port/ferry choice in RoRo freight transportation. The authors employ the Aaker and Day
Model (2004), which was applied by Deng (2008) later on. Based on their work, an

High

importance-performance model is developed as Figure 4.6 shows.

Keep up the good work

Possible overkill

Quadrant I

Low performance dif.

Quadrant II

Salient factors

Low Priority

Concentrate here

Quadrant III

Quadrant IV

Low

Importance

High

Figure 4. 6 Importance-performance analysis

Source: adapted from Martilla and James 1977, Mangan et al.2002, Deng et al. 2008

Each quadrant provides management information or service strategies. Variables in

quadrant I (high importance and high performance) represent competition and are
deemed major strengths; the service should be maintained, leveraged, and heavily
promoted (Lambert & Sharma, 1990). The organisation should keep up the good work
because it shows the focal performance meets customers satisfaction. Items here are
identified as salient factors. Quadrant II represents low importance but high
performance, which means the resources are over allotted. The organisation can thus
allocate a portion of the resources to the variables with high importance and improve the
other variables, for example Quadrant IV variables (concentrate here) to achieve a
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more efficient flow and allocation of the ports resources. Quadrant III represents low
importance and low performance. Thus, the organisation should consider stopping or
decreasing the resources to these variables. Quadrant IV represents high importance but
low performance; these items are major weaknesses and should be top priority and
targeted for immediate improvement efforts.
Revised IPA employing the three-factor theory
Matzler (2003), Deng (2008) and Deng et al. (2008) question traditional IPA by
employing the 3-factor theory. The three factors refer to basic factors, performance
factors and excitement factors. According to Matzler et al. (2003), the basic factors are
minimum requirements that cause dissatisfaction if not fulfilled but do not lead to
customer satisfaction if fulfilled or exceeded. They are basic requirement and of utmost
importance. Performance factors lead to satisfaction if fulfilled or exceeded and lead to
dissatisfaction if not fulfilled. They cause satisfaction or dissatisfaction depending on
their performance level. They are the second most important. Excitement factors can
increase customer satisfaction if delivered but do not cause dissatisfaction if not. They
are the least important as they comprise augmented or enhanced services.
The authors argue that this theory has two features: 1. Importance of a basic or
excitement factor is based on its performance. Basic factors are crucial when
performance is low and excitement factors are crucial when performance is high
(Matzler et al. 2004). 2. The relationship between factor performance and overall
customer satisfaction is asymmetrical.
Various ways of positioning the grid lines
IPA is a graphic technique and the interpretation of the Action Grid depends on the
quadrant where the factor is accurately placed (Crompton and Duray1985). The correct
positioning of the factors is critical to derive the marketing strategy.
The literature has reviewed different ways of positioning the grid lines. Firstly, Martilla
and James (1977) suggest that the positioning of the boundary lines is a matter of
judgement. They note that the value of IPA lies in determining relative rather than
absolute levels of importance and performance. That is why they practically move the
axes in case of the absence of low importance and low performance ratings. Secondly,
Guo and Zhang (1997) treat the centre of the scale as the grid lines. For example, if the
data is collected by a 5-point Likert scale, the centre is 3, so the matrix is divided by 3
on the X axis and 3 on the Y axis. Lastly, Martilla and James (1997) adopt grand mean
130

instead of medians as the grid lines to avoid discarding the additional information
contained. Following that, Ford et al. (1999) and Huang et al. (2006) employ grand
mean as the grid lines, which is the overall average of all the attributes on importance
and on performance. They use the means of overall service expectation and satisfaction
as the boundary lines to separate the grid into four quadrants. However, they explain
that median values are theoretically preferable to means, as a true interval scale might
not exist.
Although a few options exist in the literature to use median, mean and centre of scale,
the grand mean is the most widely adopted way for the boundary. This explains why
this research adopts grand mean as the gridline.
Various methods of measuring attribute importance
A variety of methods have been employed to measure variable importance. Basically,
there are two types of importance: explicit self-stated importance and implicitly derived
importance.
Explicit self-stated importance
Griffin and Hauser (1993) compare three different measures of explicit importance,
namely, direct rating, constant-sum scale and anchored scale. They find no significant
differences between these methods. Crompton and Duray (1985) investigate two selfstated methods: plotting by mean values and plotting by median values. Their empirical
investigation show little difference between the two self-stated methods. Matzler et al.
(2003) employ three explicit methods (direct rating of importance on a five-point rating
scale, a partial ranking method and the mean ranking). A comparison of these rankings
shows a strong correlation between the three methods. These results suggest a low
sensitivity of importance weights to the measures of explicit (self-stated) importance.
Implicitly derived statistical importance
Self-rated importance rating has some shortcomings: 1. The researchers tend to include
attributes salient to the customers (Chu 2002); 2. Self-rating of importance is subject to
response bias due to the influence of social norms and the importance is not predictive
of satisfaction (Brooks et al. 2010). Implicit importance, which aims to incorporate the
determinant attribute of performance into importance, can complement the shortcoming.
Researchers have presented different methods to generate the implicit statistical
importance and develop the revised IPA, including regression analysis, partial
correlation, bivariate correlation and composite ranking (Bacon, 2003; Matzler et al.,
131

2003; Deng et al., 2008a; Huang et al., 2006; Slack, 1994). They use the different
methods to infer the priorities for improvement from the importance-performance space
as well as different methods to measure the importance of the attributes. Matzler et al.
(2003) note that when some form of implicit measurement of importance is used (e.g.,
the variable correlation is with an external criterion like overall satisfaction), implicit
importance is derived, given the current level of variable satisfaction. The implicit
importance measures are derived based on performance perceptions (Van Lttersum et al.
2007). The implicitly derived importance might reduce the errors arising from the
subjective judgement by customers who give self-stated importance (Deng et al., 2008b).
Crompton and Duray (1985) investigate two statistical methods to derive implicit
importance: plotting by Pearson correlation coefficient and plotting by Spearman
correlation coefficient. They find little difference between the two statistical methods.
Deng (2008) uses weightings from partial correlation coefficients instead of mean or
median for the analysis. The value of performance is presented in percentage (%)
instead of mean/median. He claims that the use of relative importance and relative
performance is more suitable for strategy analysis. The partial correlation coefficients
are used as implicitly derived importance weights, which are gained by correlating
variable performance (satisfaction) with overall customer satisfaction (OCS), as Oliver
(1997) states that implicitly derived importance relies on an actual assessment of how
each variable is related to overall satisfaction.
Chudasama (2009) derives importance weights from the factor loadings of the principal
component analysis. Lin et al. (2009) employ a method of ratio to produce the implicit
importance. They use relative importance (RI=importance/average importance) and
relative performance (RP=performance/average performance) and combine them with
the traditional IPA to produce a revised matrix of importance-performance gap analysis
(IPGA). The revised IPGA matrix is similar to the traditional IPA model. The RI and
RP measures are represented by the Y axis and X axis respectively to form a twodimensional matrix. These two axes divide the IPA grid into four quadrants through
which the crosshairs are set at the grand means of RI and RP. In this way, each attribute
can show up according to its mean rating value respectively.
As Crompton and Duray (1985) and Matzler et al. (2003) identify that implicit
importance by difference methods result in similar results, employing one method to
derive implicit importance can be representative of implicit importance. Van Lttersum
et al (2007) note that derived importance should not replace stated importance and the
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two measures are complementary, each providing a different perspective on the value of
the criterion.
Bacon (2003) reviews different approaches used to undertake IPA and compares them
across 15 databases. He finds that using direct measures of importance instead of
correlation coefficients is better, as the underlying assumptions of correlations are often
not met. However, Matzler et al. (2003) identify that statistical methods are more
appropriate than explicit importance as they correlate more closely with actual
perceptions (Crompton and Duray, 1985; Neslin, 1981). To make this research rigorous,
both explicit importance and implicit importance are considered, so that subjective and
objective importance are addressed and compared to avoid biases.
Revised IPA model with explicit and implicit importance
The above gives the growing evidence that both explicit importance and implicit
importance are important and should be considered simultaneously to produce the factor
structure of customer satisfaction.
Matzler et al. (2003) propose a model importance grid that distinguishes the factors of
customer satisfaction into three categories and places them into four quadrants in the
matrix. The three-factor theory suggests that customers evaluation of variable
importance does not adequately measure the implicit importance of variables. Based on
the three-factor theory (Section 2.3.4), based on the work done by Matzler et al. (2003),
Deng (2008), Deng et al. (2008), Lin et al. (2009), and based on the underpinning of

Low Implicit importance

High

IPA, a new model is put forward as Figure 4.7 shows.

Excitement Factors (3)
High implicit importance/
Low explicit importance
II

Performance Factors (2)

(Important)
High implicit importance/
High explicit importance
I

Performance Factors (2)

(Unimportant)
Low implicit importance
Low explicit importance
III

Basic Factors (1)

Low implicit importance/
High explicit importance
IV

Low

Explicit importance

High

Figure 4. 7 The importance grid

In this model, the horizontal axis represents explicit importance while the vertical axis
represents implicit importance. Different methods can be employed to produce the
values of the explicit importance scale and implicit importance scale, as presented
earlier. Items that fall in Quadrant IV (low implicit importance and high explicit
importance) are basic factors. Items that fall in Quadrant I (high explicit importance and
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high implicit importance) and III (low explicit importance and low explicit importance)
are performance factors. Items that fall in Quadrant II (low explicit importance and high
implicit importance) are excitement factors.
4.6.4 Summary of IPA
IPA is a simple, effective technique and effective managerial strategy that can assist
practitioners to develop a new marketing strategy, to evaluate an existing strategy, and
to identify improvement priorities for service attributes and develop the business
performance (Crompton and Duray 1985; Hansen and Bush 1999). IPA aims to research
customer satisfaction as a function of expectations related to both importance and
performance (Martilla and James 1977). Employing IPA allows companies to yield
important insights into which aspect of the marketing mix they should devote more
attention to achieve customer satisfaction and identify areas consuming too many
resources (Matzler et al. 2004).
The rich literature on IPA has indicated that it can become a valuable and effective tool
for strategic management and decision-making. The framework to employ traditional

Low importance High

(a) Traditional IPA

Salient
factors

Low importance High

(b) Revised IPA by gap analysis

Low imp. performance High

Urgent
factors

Low performance High

Low performance High

IPA, IPA by gap analysis and revised IPA by 3-factor theory is shown in Figure 4.8.
Excitement
factors

Unimportant .
performance
factors

Important
performance
factors

Basic factors

Low explicit importance High

(c) Revised IPA by 3-factor theory

Figure 4. 8 Integrated importance-performance analysis framework

This research employed the framework to identify key factors influencing port
performance. The traditional IPA (explicit importance against explicit importance) is
employed to identify factors for urgent actions; revised IPA by gap analysis (explicit
importance against explicit performance difference) is employed to identify salient
factors and revised IPA by 3-factor theory (explicit importance against implicit
importance) is used to identify basic factors.
Based on these findings, improvement priorities are set, and areas of possible overkill
and areas of acceptable disadvantage are identified (Matzler et al. 2004). Hence,
following a survey with IPA analysis, ports can make rational decisions about how to
134

best deploy scarce resources to attain the highest degree of customer satisfaction. This
research employed this approach to analyse the importance and performance of the
selected 15 factors from the literature review and interviews to produce a management
strategy for ports.
4.7 Ethical issues
Researchers have responsibility for ethical issues such as interviewees interest,
sensitivity and privacy and ensure their physical, social and psychological well-being.
Four ethical issues were considered through the whole research: harm to participants,
lack of interviewees consent, invasion of privacy and deception, as identified by
Bryman and Bell (2007).
Specifically, before conducting interviews, phone calls were made to ensure the
interviewees were willing to participant. The interviews were recorded with the
interviewees consent. For the questionnaire, it was also freely decided by the
respondents whether they would like to participate or not. The research purposes were
explained clearly to the interviewees who were assured the data would be used only for
research purpose and not used for any other purpose. The interviewees were assured of
the right to withdraw at any time. For interviews, the transcripts were given to the
interviewees if they so requested, to check whether the transcripts accurately and fairly
reflected their thoughts. Confidentiality and anonymity were ensured and private
questions were avoided.
4.8 Chapter summary
The overall research design employed for the current research combined qualitative and
quantitative methods for data collection and data analysis. It is widely recognised that
both qualitative and quantitative methods have their own strengths and weaknesses.
Neither is deemed to be superior to the other. This pragmatist paradigm rejects the
incommensurate view and the either/or choice between qualitative and quantitative
research methods. The utmost importance was given to the nature of the research and
the research objectives, rather than being constrained by a specific philosophical
paradigm.
This chapter started by explaining the importance of choosing an appropriate research
methodology, and the research objectives were emphasised. Then the two extremes of
research philosophies (positivism and interpretivism) and their different preferences for
135

data collection and analysis were discussed. The researchers personal philosophical
stance of pragmatism was identified. Then the research approach, strategy and methods
deployed in this thesis were identified and discussed. Both in-depth interviews and
questionnaires were employed because of their distinctive strengths. In-depth interviews
were utilised to yield deep and generalized information, and questionnaires were
developed to verify and refine the findings and gain new insights in the real-life context.
The chapter then moved on to explain why interviews and questionnaire surveys were
chosen as the research methods for this research and the rationale for the research
design was explained. A detailed account of the research process was given. Then each
data collection method was explained. Finally, quality criteria were discussed in relation
to this research. In particular, this research applies mixed methods to ensure the validity
of the findings.
Having outlined and justified the methodological concerns in conducting this research,
the thesis will move on to examine the findings of this research. These are presented in
two chapters: interview analysis and questionnaire analysis. The next chapter will
present the interview data and discuss the findings of the first phase of research based
on interviews. Chapter 6 will put forward and examine the findings of the second phase
of research by questionnaires. The findings of these two phases of empirical research
will be combined and discussed, and the research aims and objectives will be reflected
and highlighted in Chapter 7. Through the examination of research findings by using
these evaluation criteria, it is hoped that this thesis may reach a contextually rich and
reasonable conclusion. Finally, this thesis will conclude with key findings, contributions,
implications, limitations and recommendations for future studies.

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5. EXPLORING THE DEVELOPMENT OF PORT

PERFORMANCE: PORT STAKEHOLDERS VIEWS
This chapter deals with interviewees perceptions and experiences of factors influencing
port performance in both China and the UK. The presentation and discussion of findings
within this chapter are elicited from empirical evidence collected in the first research
phase of in-depth semi-structured interviews. The data collected are presented and
elaborated in terms of important factors that determine port performance, which are
closely related to the research objectives presented in Chapter 1. Comments are made on
findings that are both expected and unexpected.
This chapter addresses the factors that influence port performance one by one from the
interviewees point of view. For discussion purposes, the interviewees responses were
classified into eleven categories, as shown in Table 5.1. A discussion of each category is
given to explore the factors that influence port performance.
Table 5. 1 Number of interviewees who raised factors that drive port performance

Service

Cust&
border
service
16

18

Log.
Demand
18

14

10

70

80

30

80

90

70

30

30

30

70

Loca
-tion

Gov.
supt

Port
infr.

Trans.
Inf.

ICT
serv.

No. of
informt

XM

18

20

14

16

HB

16

12

14

% of
informt

XM

90

100

HB

80

60

Factor

Cost

Sealink

Other
factors

10

18

Total
informentts
20

16

16

20

90

50

40

90

100

50

80

30

80

100

Row 1 gives the factors raised by the interviewees. Rows 2 and 3 give numbers of
interviewees who raised the factors for Xiamen and the Humber respectively. Rows 4
and 5 present the percentage of interviewees (numbers in Rows 2 and 3 respectively,
divided by total number of interviewees) for each region.
5.1 Geographical location and proximity
Figure 5.1 presents the relative location of the Humber and Xiamen in the world, as
stated in Section 4.2.5. The Humber is on the east coast of the UK while Xiamen is on
the southeast coast of China.
The Humber is situated centrally on the east coast of the UK (Figure 5.2). It is a large
tidal estuary on the east coast of Northern England and drains a catchment area of some
24,472 km2, around 20% of England is total land surface. It forms part of the boundary
between the East Riding of Yorkshire on the north bank, and North Lincolnshire and
Northeast Lincolnshire on the south bank, being 120km long and 14km wide at its
broadest.

137

Figure 5. 1 Location of the Humber and Xiamen in the world

A: Xiamen; B: the Humber

Source: Google-Map

The Humber has the UKs largest port complex, including Hull, Grimsby, Immingham,
Goole, New Holland and Killingholme. It has 40,000 ship movements per year and its
ports and wharves handle 14% of the UKs international trade (YH Strategy 2006).
Industrial sites alongside the estuary include chemical works, oil refineries and power
stations that dominate ports of the shore area.

Figure 5. 2 Location of the Humber (source: Google-Map)

138

Facing the European continent, the Humber has strategic importance as the gateway site
to the North Sea. The director of ABP highlighted the Humber as the UKs centre of
gravity for seaborne trade. During the interviews, 16 (80%) of the Humber ports
interviewees commented on the Humbers strategic location. Here are typical quotations:
The critical point for Humber to development logistics is its location, location and location!
Humber Interviewee 5
The most important benefit of this area is its location. The Humber ports are highly significantly
located to link east and west. Within 4 hours of drive, there are 40million population of UK.
Humber Interviewee 4, a Port Manager
Strategic location of the Humber ports is capable of providing overnight shipping services of less
than 12 hours to and from the continent. It is centrally east-coast located with equal distance to
London, Edinburgh and Rotterdam.
Humber Interviewee 3, a City Council Officer
60% of all freight tonne kilometres of containers and trailers passing Felixstowe and Southampton
are to and from the three Northern Way regions. The Humber ports could provide relief to the
congestion in the southern ports with shorter times and at lower costs
Humber Interviewee 11, a CEO of Consultancy

Xiamen is a port city, located in the southeast of China (see Figure 5.3), connected with
YRD in the north and PRD in the south, and separated from Taiwan by the Taiwan
Strait. More specifically, Xiamen is on the southeast of Fujian province, at the mouth of
the Jiulong River. It is backed by the Zhangzhou and Quanzhou Plain, and faces the
island of Kinmen in Taiwan. Xiamen is composed of Xiamen Island, Gulangyu, Tongan
and the inland northern coastal parts of the Jiulong River, with a land area of 1,565km2
and sea area of 300km2. Xiamen is well known as an international port city with a rich
landscape. Xiamen ports have 234 km of winding coastline (Zhang 2009).

Shanghai

Hangzhou

Fuzhou
R=200KM
Guangzhou Meizhou

Xiamen Taiwan

Shantou
Shenzhen

Figure 5. 3 Locations of Xiamen

(source: Google-Map)

Outside the ports are scattered islands and the port area is surrounded by hills. The ports
are superior natural harbours with deep water that is ice-free all year-round. As Xiamen
139

is important for trading with Taiwan and other international ports, Xiamen ports are
important to handle trade with their favourite natural endowments. Xiamen has a mild
subtropical climate. The annual average temperature is 21 degrees, with no seasonal
extremes of heat or cold. The location, weather and unique historical background are
conducive to Xiamen port performance.
Concerning location, some interviewees thought Xiamen had a location advantage,
some interviewees thought Xiamens location was not good, and other interviewees
thought location was not important for port performance improvement. Specifically,
twelve (60%) of Xiamen respondents considered geographical location was an
advantage to develop a port. Being equidistant from Shanghai (supported by YRD) and
Hongkong (supported by PRD), Xiamen is an important city in Southeast China.
Xiamens proximity to Taiwan, Hongkong and Macao grants Xiamen a strategic
political location. Xiamen has its unique advantages over Taiwan in terms of location,
economy and politics. Xiamens proximity to Taiwan is well known: the closest
distance between them is less than 3km. Socio-economically, one tenth of Taiwanese
nationals whose ancestors came from mainland China have Xiamen citizenships. The
geographical proximity, common language and customs, and ethnic relationships
between Taiwan and Xiamen play an irreplaceable role in promoting cross-strait
economic and trade cooperation and cultural exchanges to attract Taiwanese investment.
Politically, Xiamen is strategically positioned to promote the peaceful reunification of
Taiwan with mainland China. Among the five special economic zones (Shenzhen,
Zhuhai, Shantou, Xiamen, Hainan), Xiamen is the only zone to be approved to
implement certain Freeport policies. This unique policy advantage has enabled Xiamen
to be a special economic zone with the highest degree of openness (Huang 2009). The
location advantages bring the economic and political advantages to Xiamen.
The interviewees commonly recognised the location as a very important factor for
Xiamen to develop its logistics, either due to its geographical position or its political
position in relation to Taiwan, for example:
Xiamen is strategically located close to Taiwan. When the weather is fine, you can see clearly
Kinmen Island (of Taiwan) from Huandao Road (of Xiamen). Xiamen is absolutely the best place to
conduct the trading between mainland China and Taiwan.
Xiamen Interviewee 1, a 3PL manager
Xiamen has a strong point to develop port performance with a Haixi (West to the Taiwan Straight)
frontier position. It has both a political and economic meaning.
Xiamen Interviewee 7, a Carrier Manager
Xiamen lies to the west of Taiwan Straight, which gives the preferential consideration by the
government to build the relationship between Taiwan and Xiamen

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Xiamen Interviewee 15, a professor in one maritime institute

Xiamens proximity to Taiwan gives Xiamen an advantage in trading with Taiwan, not
only in high volume but also small-scale trade. The small scale trade with Taiwan in
2009 amounted to 110 million USD, said one interviewee. He further explained,
The small scale trade with Taiwan has become one of the major highlights of cross-strait trade in
2009. It has the advantage of flexible operation to facilitate fast and efficient customs clearance. The
cargo would come and go between Taiwan and Xiamen small scale trading ports by Taiwan boats.
Then the logistics companies deliver cargoes to customers. This special fast mode provides
services of small volume with frequent batches, efficient and flexible distribution. The customers can
get cargo delivered within 2-3 days, which the large scale trade cannot compete with.

The importance of Xiamens location stems not only from its proximity to Taiwan, but
also from its strategic location for eastern China and eastern Asia.
For the development of port performance, the important factor is location, location, and location!
As it is in the middle between Shanghai and Shenzhen, it can attract the hinterland cargoes between
Yangtze River Delta and Pearl River Delta.
Xiamen Interviewee 12, a Director of port authority
Geographically, Xiamen is in the centre between Japan, South Korea and Southeast Asia. All the
ships in the western Pacific and central/Northern China go to the South China Sea and those for the
Indian Ocean must go via Xiamen.
Xiamen Interviewee 18, a LSP manager

Six (30%) interviewees, however, considered that Xiamens location was not favourable.
Another three interviewees claimed that although the location is important, it cannot be
improved, since the ports are naturally geographical resorts. To their understanding,
location is beyond the control of terminal operators and port managers.
Xiamens location has both advantages and disadvantages. As addressed earlier, 30% of
interview interviewees assessed its location as not good, compared with other port cities
that have better performance, such as Shanghai, Shenzhen, Hongkong, Guangzhou.
They thought those ports are better located, with stronger hinterlands.
The findings on Xiamens location indicate that Xiamen has a location advantage over
Taiwan, eastern China and eastern Asia. Its location in relation to Taiwan is
geographically, politically and economically important, which enables Xiamen to have
advantages to improve its port performance.
Interviewees from both regions clarified that their regions benefited from a strategic
geographical location that was conducive to their port performance, although Shanghai
and Shenzhen comparatively over shadowed Xiamens location. This finding is
consistent with the literature (Skjott-Larsen et al. 2003; Song and Yeo 2004; De Langen
et al. 2007; Yeo et al. 2008; Tongzon 2009), and particularly supports Lirn et al. (2004)
who found that three out of the top five transhipment port selection sub-criteria are

141

location-related. However, the finding also supports Lirn et al. (2004) who note that
port location is a factor beyond control.
5.2 Government support
All thirty Xiamen interviewees considered that government support is important to
influence port performance. As one interviewee said,
Government support is the most important thing in China to develop port performance. It is definite
that port cannot develop without government support, although developing port performance may
not work if only depending on government
Xiamen Interviewee 20, a Manager in a shipping company

Firstly, government support to logistics is reflected in preferential policy on tax

reduction or tax exemption. This point was also made by one interviewee,
Our company is located in the bonded zone, hence enjoys the policy of tax benefit. We can save
tariff and VAT (value-added tax) to reduce our cost and make us more competitive in the market.
Xiamen Interviewee 6, a Manufacturer Logistics Manager

Eight (40%) interviewees noted that the interaction between the bonded zone and port
together with the bonded port policy would promote Xiamens port performance.
Preferential policies are intended to promote Xiamen as a regional transhipment port.
As one port director said,
The resource integration and interaction between Xiangyu Bonded Zone and Dongdu Port, and a
new bonded zone in Haicang Port Area will help to create a favourable environment for the
development of port, improve logistics efficiency and quality, enhance the Xiamen Harbour
Management and service levels, leading to improve opening up at new levels of Xiamen.

However, in many areas, although there are policies, they are not well implemented. For
example, manufacturers do not benefit from the preferential policy, as illustrated in the
following comments:
We have to waste more time and energy to prepare more documents to meet those extra
requirements as we are in the bonded area. The extra burden may drive us off the bonded area
Xiamen Interviewee 4, a Manufacturer Vice Director
The concept of Zone-Port Interaction (interaction between tax-free-zone and port) has been
raised for years, however, the scheme has not come to action. There is a big gap between the
strategy/scheme and actions.
Information 13, a consultant Expert

There is a common gap between expectation and satisfaction. What is important is to

shrink the gap and make the expectation come true. This depends on the efforts of both
government and the enterprises.
Secondly, government support to logistics can be reflected in investment in physical
infrastructure and port technical infrastructure, as one interviewee explained:
Xiamen government has invested a lot in the physical infrastructures, such as highway, railway,
bridge, port facilities and information system. Three new railways will be put into use by 2015 to

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connect Xiamen and inland China. More highways and more bridges to connect Xiamen and outside
will be available in two years. The government has contributed to the infrastructure.
Xiamen Interviewee 7, Maersk Line Manager

Thirdly, the Xiamen government has a logistics scheme that targets Xiamen as a
logistics city; this is evidence that the Xiamen government supports port performance.
Xiamen government has won a good reputation of being open and transparent. The
interviewees realised the importance of government support to port performance, as
Interviewee 3 from government claimed:
We have promoted the image that Xiamen will be developed based on the port, become prosperous
based on the port and become competitive based on the port. Xiamens future development and
strategy will be based on this conception.

However, sometimes the scheme may not be appropriate. Concerning the regional
strategy, in Xiamen City and Port Development Scheme in 2004, Xiamen targeted to
become an international transhipment port. However, Interviewee 17, one APL
Manager, commented that Xiamen is not suitable for developing an international
transhipment port. He said,
According to the common rule that an international transhipment port should handle more than 20%
of transhipment cargoes, Xiamen, which has only 0.4% of transhipment cargoes, is far from
becoming an international transhipment port because of its location constraint, historical constraint
and policy constraint.

Fourthly, central government support is of key importance. Interviewee 14 explained,

The local governments measures depend on central governments direction. As central
government has positioned Xiamen as one of the 9 logistics cities in China, Xiamen government has
put lots of efforts to improve port performance.

The Central Government are clear about the importance of Xiamen to Taiwan and
promoting the policy of three big links which means three strong direct connections
between mainland China and Taiwan: connections by air/ship, connections by trade and
connections by post. Obviously, three big links improve Xiamens logistics by trade
and transport, as indicated by one interviewee:
Three big links has promoted the communications between Taiwan and Xiamen, not only in terms
of passengers, but also in terms of cargoes. The trade has increased sharply between Taiwan and
Xiamen since the first trial of three big links. The direct vessel and direct flight between Taiwan
and Xiamen have reduced the logistics cost and saved time dramatically.
Xiamen Interviewee 16, a COSCO Manager

Nowadays it takes a direct vessel only two days from Xiamen to reach Taiwan. Before
three big links, vessels had to tranship via Hongkong to Taiwan, which took about 10
days. Direct shipment not only reduces shipping time but also reduces transport costs.
According to statistics from the Xiamen Logistics Association, the cost reduction from
cargo and passengers is up to millions of United States dollars a year. The information
flow between Taiwan and Xiamen has also been improved significantly.
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Since Chinas State Council raised the concept of the Haixi Economic Zone in May,
2009, both Taiwan and Xiamen have been proactive in the communications of logistics
trade cooperation and culture exchange. Six out of the 20 interviewees (30%) spoke
about the Haixi policy. They thought this policy would encourage physical
infrastructure improvement and cross-region cooperation so that trade and logistics
would be greatly improved. The interviewees believed that the Haixi policy would
attract much FDI. For example, many Taiwan companies have located their factories or
offices to Xiamen since Xiamen started to offer preferential policies to investors from
Taiwan, Hongkong and overseas.
However, Xiamen does not offer such preferential policies as other ports such as
Shenzhen and Shanghai. Even with the current preferential policy, shippers and other
port users cannot really enjoy the benefit. As one interviewee explained,
We will see if Xiamen can make good use of the policy to attract Taiwanese business and
investment. Xiamen did not perform so well as Suzhou and Hangzhou that have attracted similar
amount of investment from Taiwan in the past 5 years as Xiamen has done in the past 20 years,
which implies that Xiamen has some room to improve. The government is supposed to do more and
coordinate between different departments and improve the services...
Xiamen Interviewee 15, a Manufacturer Manager

The regional logistics scheme is part of government policy. As explained by the

interviewees, Xiamen had three scheme problems: 1. The layout of port performance is
the main problem. There is no clear separation between residential, port and office areas.
This results in congestions in rush hours. 2. Overinvestment in Xiamens port technical
infrastructure is recognised as another scheme problem. Xiamen has seven ports whose
production capacity reaches 13.8 million TEU in 2009, three times the actual shipping
volume. By 2011, the capacity will amount to 18 million TEU. The over-capacity due to
uncoordinated development of ports has caused a serious waste of resources and higher
operations cost. As one interviewee commented, Dalian and Xiamen are known as the
two big ports with most overinvestment, which result in fierce competition. 3. Fujian
provincial government put forward a port development plan, Liang Ji Liang San,
which means Fujian will focus on two container ports in Xiamen and Fuzhou which
target 20-30m TEUs and two bulk ports in Meizhou Gulf and Luoyuan Gulf which
target 200-300m metric tonnes development. This scheme of over-capacity will
increase the competition between different ports, which will result in worse profit and
poorer efficiency. This scheme violates the trend of integration. The irrational
competition is not conducive to regional ports efforts to upgrade overall
competitiveness, and will weaken competitiveness in the long term.
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Based on the interview analysis, government support to Xiamen ports is complicated.

On the one hand, government is trying to support port development with preferential
policies. On the other hand, the support is limited and hindered by the relationship
between Taiwan and mainland China. Moreover, the logistics scheme drawn by the
government might be problematic due to lack of experience and expertise.
According to the Humber interviewees, government support is not very positive. For
example, the interviewees complained about the very slow planning process, as
indicated below:
We need a better planning approval process, better and faster, and more transparent. The whole
process itself is too slow, lengthy and cumbersome.
Humber Interviewee 16, a Port Authority Director
The Port of Hull has eventually got consent for a container terminal, which is called Quay 2005, it
was originally called Quay 2000. Till now it has not started construction yet. I am afraid it will be
renamed as Quay 2010.
Interviewee 7, a Regional Development Agency Manager
We cannot develop new facilities because of restrictions in the planning process. We want to
develop new berths in the river, but we face considerable difficulties in terms of the challenge of
obtaining planning permission. In terms of constraints and challenges, No. 1 is the planning process.
Humber Interviewee 4, a Port Manager

The UKs slow planning process is one factor that negatively influences port
performance. The Hull container terminal project is a convincing example. Other
projects in Grimsby also face the same problem. The issue of slow process also applies
to other UK industries. One example is the Heathrow Terminal 5 project. The project
was approved by the Secretary of State in 2001, after the longest public inquiry in
British history (46 months). The planning process itself cost nearly 63m over a period
of 14 years (http://www.designbuild-network.com).
In contrast with this example, it took less than one year for Beijing Terminal 3 (which
has a similar scale and facilities) to be approved. The cases imply fast change in China
and slow change in the UK. According to one Xiamen interviewee,
Our China headquarters is in Shanghai. Whenever I go to Shanghai (once every three months), I
am surprised at the changes there. Its amazing to experience the changes!

According to the Humber interview interviewees, the UKs slow planning process is
caused by too many interest bodies that change frequently, which results in inefficiency.
As one port director pointed out,
It has Yorkshire Forward as the RDA (regional development agency). Different public sectors were
formed and named as the Humber Forum, Humber Trade Zone (HTZ), World Trade Centre (WTC),
Humber Economic Partnership, Hull Forward and so on. But most people do not know what they do
and when they will disappear and appear by a different name.

Some interviewees questioned the four unitary authorities, namely, Hull City Council,
Lincolnshire Council, North Lincolnshire Investment and East Riding Investment in the
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Humber estuary, as the four local councils did not have a consistent strategy to follow,
which hinders local development, as Interviewee 15 complained:
When I came to set up a business in this region, I did not know where to go and whom to speak to. I
had to try every possible organisation. This was like the trial exercises. Such kind of cumbersome
process would discourage investors from coming.

The interviewees were unhappy with the support from government and local authority,
as Humber Interviewee 2 said,
The government support in the region is very limited.

The interviewees stated that the government should help the port users to grow and
offer them more help. The Humber local government was expected to attract business
by grant funding or tax incentives, as it had done in the case of a huge TESCO Regional
Distribution Centre (RDC) at Goole. Interviewee 18 said,
The local government should encourage firms to set up distribution centres through either grant
funding, low rent for a couple of years or incentives in terms of tax. They should help any business
that can bring jobs to this area.

Government support to the Humber infrastructure investment was also considered

unsatisfactory. The interviewees noted that the region had suffered from a lack of
strategic infrastructure investment, especially in terms of the regional transport network.
A legacy of past under-investment served to constrain the regions potential
development, having an adverse impact on logistics performance. The interviewees
hoped that investment on infrastructure would be available from government.
One logistics manager complained that it is a pity and a shame that logistics is not one
of the sectors that RDA is working intensively to assist. To RDAs understanding,
logistics does not produce something people consume. It was not regarded as a valueadded sector, so it was not considered as high priority at the regional level. This
indicates that RDA cannot pay sufficient attention to the Humber estuary and this region
lacks an overall regional logistics strategy.
When asked why the Humber lacked funding, one interviewee explained that South
Yorkshire was classed as objective 1 for the European Social Fund (ESF), and European
money was available to regenerate this area. However, according to the national strategy,
most Humber and Yorkshire areas were objectives 2 or 3, so the subsidy funding
available was less and less. This is why the Humber critical problems are still awaiting
solution, like the bottleneck of Castle Street. As one interviewee complained,
Road infrastructure, port facilities and other physical infrastructure are big challenges in this area
due to insufficient investment.
Humber Interviewee 4, a Port Manager

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There is a big difference in the infrastructure investment between the Humber and
Xiamen. In Xiamen, the government invests quickly in infrastructure to attract business.
If the local government cannot provide support, the central government will invest or
help with financing to get the project done, or central government, local government
and private entities will share responsibility for the investment. The difference comes
firstly from the different institutional systems and secondly from cultural difference,
which will be discussed in Chapter 7.
So far, the governments roles on logistics support have been addressed based on the
interviewees responses. From the interviewees feedback on government support,
generally speaking, Xiamen interviewees thought the government was very supportive
while the Humber interviewees thought otherwise. Both Xiamen and the Humber
findings reflect that government support is very important to port performance, whether
the government has played a positive role or not. The difference is that strong support
improves port performance while inadequate support hinders port performance.
The finding that government support is critical to port performance is in line with
claims in the literature that government plays a prominent role in the complex crossborder environment in international logistics (Banomyong 2005), and in investments in
ports including physical infrastructure, port technical infrastructure and ICT (Arvis et al.
2010).
5.3 Port technical infrastructure
Port technical infrastructure refers to port facilities, size of the container terminal and
the information technology status of the port (Lirn et al. 2004).
5.3.1 Port facilities
Up to 2009, Xiamens port technical infrastructure included 16 terminals, 122 berths, 5
anchorage areas and mooring buoys, 625 items of mechanical equipment, and a storage
yard of 1,826,196m2 (Huang 2009).
According to Xiamen Logistics Development Scheme (2008), at the end of 2008, there
were 40 berths. The ports were facilitated with specified terminals for containers, oil,
coal and other products. Sixth generation container ships were able to call at the
container terminal and berthing operations could be directly done there (Wang and Chen
2008).

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According to Xiamen interviewees, good port technical infrastructure and natural

conditions are one of the factors to improve Xiamen port performance. With the
superior natural conditions, the Xiamen gulf was formed with wide harbour waters by
some islands including Big Kinmen Island and Small Kinmen Island. As the ports
developed late, the facilities included high-tech equipment such as the gantry cranes,
bridge cranes. The terminals and berths were well constructed with the help of advanced
technology. Fourteen (70%) Xiamen interviewees gave very positive appraisals of
Xiamen port infrastructure and facilities. For example,
Xiamen has very complete and convenient logistics facilities and the ports were born of very good
conditions with deep water, strong wind protection, no silting and no freezing season
Xiamen Interviewee 3, a vice director of a Port Operator

The director of Xiamen port authority recognised the importance of port infrastructure,
The supply of good quality infrastructure must be ahead of the demand. Otherwise, customers
cannot be attracted.

On the Humber, according to the interviewees and ABP website, the Humber ports have
17 quays with water depth ranging from 4.5m to 14m. The estuary has oil, gas, bulk and
general cargo terminals to handle different sorts of cargos. Immingham has fourteen
100-tonne capacity mobile harbour cranes (one privately owned), two 15-tonne electric
grabbing cranes, two 10-tonne electric cranes, two 40-45-tonne ship-to-shore container
gantry cranes, two 40-60-tonne capacity mobile harbour cranes, one privately owned
mobile grain loader and privately owned mobile cranes with a capacity in excess of 100
tonnes are available. Hull port has a wide range of supportive industries, such as marine
engineering and ship repairing, for which both dry docking and wet berths are available.
In Grimsby, a wide range of privately owned specialised handling equipment and
privately-owned mobile grain elevators are available. Immingham has 20,000m2 of
high-quality bulk warehousing and 10,000 m2 of high-quality general purpose
warehousing. Grimsby and Hull have a wide range of covered and open storage. Goole
has two dry docks and some specialized facilities providing ro-ro services.
The Humbers technical infrastructure, however, was not highly rated. The Humber
interviewees noted that in the Humber estuary, only Immingham has deep water. The
navigation depth constrained the Humber to serve container vessels and the Humber
ports are targeted as feeder ports instead of transhipment ports. One manufacturer
logistics manager expressed his concern that the ports could not provide suitable
facilities for bigger vessels to call.

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Our business needs to bring bigger vessels due to our increasing business; however, only smaller
vessels can come through the locket gate. The beam restriction of 25.5m wide prevents the bigger
vessels entering the gate.
Humber Interviewee 1, a Manufacturer Manager

Some other interviewees such as the port users were not happy with the port facilities,
either, as illustrated by Humber Interviewee 17, a director of a shipping company,
The facility and equipment have quality problems and sometimes they dont work. I do not think
they (the port owners) provide good facilities. The port technical infrastructure here is not good,
especially compared with the ports in Europe.

Interviewee 17 commented that the port facilities were old and out-of-date,
The equipment such as cranes here are very old, 35 years old, like third world equipment.

When asked about why the facilities were not satisfactory, most interviewees explained
that port owners had some concerns about the investment in new facilities, which is
capital intensive investment. Another example of poor facilities was given by
Interviewee 1, who said,
Being one of the biggest port customers, Drax Power Station needs huge coal demand increase,
however, the current coal terminal cannot satisfy the demand. The coal terminal expansion project
has been approved, but, due to lack of investment and maybe some other reasons, the new terminal
wont be in place shortly. Same is true with the new container terminal. The government should
work closely with port owners on the financing of the infrastructure improvement.

As the Humber ports are privately owned by ABP, they would make the assessment
based on the payback period; meanwhile they would make sure of the long-term
commercial deals with the customers to guarantee the return, according to one ABP
manager. As ABP has not obtained the contracts with customers, the projects have been
postponed. This is the problem with investment and private monopoly ports.
In terms of land availability, 90% of the Humber interviewees considered the land is
very limited and there are restrictions on permission for land use. Lack of land
availability is a very broad issue in the Humber estuary, as addressed by Interviewee 7
from RDA,
We dont have sufficient land to support the logistics development in this area. The influence is the
regional policies in terms of allocation of land and other resources.

The Port of Hull at the Humber estuary is threatened by the local communitys demand
for commercializing the port area, introducing housing, waterfront parks and other
commercial developments. The interviewees hoped that the government would help
them with land for their business development. In Hull, one manufacturer interviewee
complained that they could not increase productivity due to lack of land, although they
had sufficient capital.

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The port infrastructure also includes depth of navigation channel, which is a very
important determinant of port competitiveness in the literature (Tongzon and Heng 2005;
Tongzon 2007). Xiamen has deep water while the Humber does not. Insufficient water
depth is a constraint for Humbers port development. Good technical infrastructure
benefits Xiamen and poor port technical infrastructure hinders the Humber ports. They
exemplify that port infrastructure is important for port performance.
5.3.2 Information and communication technology system
Seven interviewees (33%) highlighted the importance of the information system. Six
(30%) interviewees noted that the IT system in Xiamen does not work effectively,
although Xiamen has set up a logistics information platform with promotion and help
from the Xiamen government. The application of the information system so far is
limited to the very basic and primary functions such as e-booking and e-billing, and
even these limited functions are confined to big companies. The information platform
has not covered a wide enough scope, as the overall operations level and skills are poor.
The supporting logistics information system has not become effective yet. These issues
are reflected in a mixed explanation of IT problems and customs service problems,
provided by Interviewee 6 from the manufacturing sector:
The information system has become the bottleneck of Xiamen port development. The link between
shippers and customs is not smooth. Our company has tried for many years to link to the customs;
however, it still does not work well. The government may declare how advanced the system is,
actually it is not. The system may work well with big companies such as Dell. Xiamen wants to retain
Dell and they provide a special team to serve Dell, however, not every company can enjoy this
privilege. Another example is BAX GLOBAL INC (Xiamen) that enjoys the 2 hours green customs
service that means Bax can get custom clearance completed within 2 hours after cargo arrival.
However, it must be noted that most other customers cannot enjoy this service.

This finding is consistent with the view of Tongzon (2009) that lack of an adequate
information system would slow down the documentation process and the smooth
functioning of a port.
5.4 Landside transport infrastructure
Xiamen Island is connected to the outside by Xiamen Bridge and Haicang Bridge.
Xiamen interviewees had a common understanding that poor infrastructure to connect
ports and hinterland is one of the main factors that hinder Xiamens port performance.
Actually, 16 (80%) of the 20 interviewees commented on the poor physical
infrastructure connecting Xiamen ports and the hinterland, especially the inadequate
railways. Here are some quotations:

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Xiamen is blocked by mountains around. Currently there is only one rail to connect Xiamen and
other places. The communication infrastructure is poor. Almost all of our customers would not
consider railway for transport, as it is too slow. Almost all links to ports rely on road, and the
highways are limited due to natural conditions.
Interviewee 1, one 3PL Manager
There is hardly any intermodal in Xiamen. People know it as a concept but also know it does not
work in Xiamen, because the physical infrastructure is not in place. Many companies even do not
have loading/unloading platforms for containers, which makes intermodal quite difficult.
Interviewee 6, a retailer Manager
The infrastructure in the whole Fujian Province is rather poor. There is not sufficient quality
infrastructure from the ports to the hinterland. The poor rail and highway infrastructure cause
higher transport cost to the shippers than other ports.
Interviewee 15, a manufacturer Manager

The interviewees noted that insufficient rail and road had caused slow transport in the
whole province. Most of the cargoes from inland China do not come from or go to
Xiamen due to lack of proper transport infrastructure. The province needs to improve
the transport infrastructure very urgently as it is very critical to develop port
performance. Xiamen is similar to Shanghai in that neither port has sufficient cargo
sources in the city itself. However, Shanghai has attracted much more cargo than
Xiamen because Shanghai has good quality infrastructure that brings cargo easily from
hinterlands. As Interviewee 11, a port manager, pointed out,
Although Xiamen has a good traffic system by sea and by air, and the sea-rail transport has
already been put into use to connect Jiangxi economic hinterland and Xiamen, there are few crossprovincial railways and they are low-grade. The main highways have not been connected to the port
areas; there are few main roads to support, which has caused too much pressure on communications
and there is serious bottleneck between ports and the city. The lack of transport capacity has
constrained the extension of Xiamens economic hinterlands towards the inland, and constrained the
logistics distribution efficiency within the region accordingly.

However, Xiamen interviewees had a positive assessment of Xiamens aviation. Gaoqi

International Airport has enabled Xiamen to link with other cities in China and
worldwide. Interviewee 7 said,
The distance between Gaoqi International Airport and port is about 10km. To my knowledge, no
other ports are so close to the airport. This has brought convenience for intermodal development.

Although the current landside links of Xiamen ports are poor, Xiamen has set off an
upsurge of urban construction, including ports, railways, highways, urban transport,
which has made a significant improvement. These changes are initiating new
opportunities for Xiamen.
As for the Humber ports physical infrastructure, some interviewees commented that the
general framework was good. The Humber estuary had good communications and good
shipping links to the close continent. As interviewee 12 stated,
The most important aspect in this area is location, good access by rail and road, good access for
marina access, and ports can handle large ships.

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Trade and industry in the Humber were boosted by the arrival of the rail link with Leeds
and other railways including the Hull, Grimsby and Barnsley Railway and opening of
associated docks to break the perceived local monopoly of the North Eastern Railway in
the 1840s, according to one interviewee. The Humber case exemplifies that transport is
important for trade and port performance.
However, the shipping lines that link the Humber and other ports in the world are not
satisfactory. There is no direct line to link the Humber and the Far East or Middle East.
This is why the Humber local companies would choose the southern ports for trading.
Regarding landside links, the interviewees had some negative comments on the port
related road and rail in Hull, and port-related rail in Immingham.
The basic framework of port related infrastructure is quite good. However, it is widely known that
some roads need improvement, like A63 Castle Street in Hull, Hedon Road and M62 and M1
improvement. The rail to connect Hull port to the power station needs improving as well.
Interviewee1, a ManufacturerManager
A160/A180 near Immingham is poor and needs improving, this has been proposed to the Highways
Agency for review to take action.
An Interviewee from the City Council
The physical infrastructure in north bank is weak around Saltend. As all traffic from the ports by
road will go through central Hull, it is very congested. We have some concerns about building a biofuel plant in Hull due to the road access problem.
Humber Interviewee 2, a Manufacturer Manager

In terms of the main road, the Humber does not have motorway advantages. The
Humber estuary is not in the heavy industry and major motorway region, which is why
it does not have very good physical infrastructure, an interviewee said:
The heavy density of industry is in west Yorkshire. Theyve also got the cross roads of M1, M62
which are major motorway networks for England. There is much more investment in west Yorkshire
than in east Yorkshire in the M62 corridor.
H6, Director of Road Haulage Association

The river with the estuary, as one transport mode of physical infrastructure, is a gateway
into the region. The interviewees noted that the Humber region has rich waterways with
its canals and tributaries. However, 60% of the respondents claimed that the waterways
were under-utilized, as there was a doubt about the demand for the waterway. Since the
waterways in the Humber were more expensive than in any other English regions in
investment, the government would not invest until they were sure about the actual
demand. The RDA manager and some other interviewees raised the concern that
waterway investment is an issue of chicken and eggs. However, they believed that as
people were becoming increasingly concerned with the environment, the waterways
would be promoted eventually.

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Some interviewees noted that Yorkshire Forward did not understand the importance of
the waterway, which is the richest in this area, to connect the sea to Leeds, Goole and
Sheffield, as Interviewee 16 said:
They understand the importance of Manchester airport, but they wouldnt see the same importance
of the Humber ports. The Humber is actually the access where goods are imported, but people dont
really appreciate the importance of ports.

As for road infrastructure, most interviewees were aware that Hedon Road and Castle
Street have been bottlenecks, but the problems are still ongoing. Although proposals
have been repeatedly raised, they have not been improved due to lack of investment.
People in Hull have witnessed no change in road conditions for over 20 years.
Interviewee 3 complained that,
The only changes we see are the changes of proposals. With time passing by, the project proposal
has become more and more expensive. More budgets are needed for the actions.

As for the link between South Bank and North Bank, the great width of the river has
prevented unified economic development on both river banks. A bridge was finally built
in 1981 to help stimulate industrial and commercial growth in the area. The bridge has
connected the industrial complexes around the Humber ports. However, the toll has
been heatedly discussed over years. It is argued that regional communications would
become better if the toll were abolished. The local citizens have had a long campaign
against the expensive toll, as its abolition would make their lives much easier. For
example, patients from the south bank travelling to Hull hospitals would save much
money. The possibility of abolition has been investigated and found feasible, as the tolls
on both the Forth and Tay bridges (in Scotland) were abolished in 2008.
The infrastructure is important, because the size of the hinterland depends on the quality
and availability of transport infrastructure. Accordingly, the logistics demand depends
on the size and economy of the hinterland. Many ports have been seeking intermodal
links to expand their hinterland. However, the finding is that there are no intermodal
links in the Humber and Xiamen.
The finding that physical infrastructure is important for port performance is in line with
Tongzon and Heng (2005) and Tongzon (2009). Sanchez et al. (2003) note that
adequate infrastructure leads to high level of productivity and efficiency. The second
finding on infrastructure shows that although intermodal transportation has been
advocated for many years, neither the Humber nor Xiamen has put this idea into
practice. The third finding on infrastructure is that waterways are not well-developed,
although the trend is to demand more waterways, due to environmental concern.
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5.5 Seaside connections

Seaside connections include deep-sea shipping services and feeder services. By the end
of 2007, Xiamen had around 96 shipping lines including container liners to connect
over 60 ports from over 40 countries worldwide (Wang and Chen 2008; Huang 2009).
Most of the top 20 carriers in the world, such as Maersk, American President Lines, the
Mediterranean Sea, P & O Nedlloyd, Evergreen, COSCO, and China Shipping, have set
up branches or agencies in Xiamen. Xiamen cargoes can go to America, Europe,
Mediterranean, Australia, Japan, Singapore, South Korea, Hongkong and Taiwan, over
40 countries worldwide.
Xiamen interviewees gave a favourable assessment of the shipping frequencies and
Xiamens links to other major ports and feeder ports, as stated by Xiamen Interviewee 7,
a carrier manager, whose view is identical with the literature by Huang (2009),
So far (2009) there are over 120 lines to connect Xiamen and other port destinations in over 60
countries around the world.

Another carrier manager in Xiamen, Interviewee 20 said,

Shipping frequency is one major factor for us to consider whether we would select the port or not.
The ports with more shipping frequency would attract the carriers more easily so that the shipping
frequency will be increased. On the contrary, ports with less shipping frequency would develop more
slowly. More carriers call at bigger ports and the container TEUs increase sharply.

The Humber interviewees showed their dissatisfaction with the Humber seaside links.
Due to lack of deep water, big containers cannot call at the Humber estuary. There is no
direct ship to the Far East. However, as feeder ports, Immingham and Hull can support
the call of short-sea container vessels.
Eight interviewees in Xiamen and nine interviewees in the Humber claimed that
frequency of shipping lines is critically important for port performance. The finding is
consistent with the literature by Slack (1985), De Langen (2007) and Tongzon (2009).
5.6 Logistics cost
Monash Marketing Dictionary defines logistics costs as costs involved in the acquisition
and transportation of materials required for production, and for the storage, handling,
and shipment of finished goods to customers. Low cost is the necessary strategy at the
initial stage of port development. It aims to attract more cargo sources to build the
customer networks. Ports have tried many measures to reduce the port cost to attract the
transhipment cargo for the long-term benefit. Port users, whether they are carriers or
shippers, seek cost minimization to survive in the current fierce competition.
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Generally, the cost was divided into three sub-sections by the interviewees: shipping
prices, port charges and overall logistics cost. Port charges in Xiamen were considered
not very important, as all the ports in China are required to use the same standard for
port charges. Ten (50%) of the twenty Xiamen interviewees held the view that Xiamen
port terminal charges to carriers were low, which is a good factor that attracts shipping
lines to call.
Xiamen port charges are lower than the country average level. For example, the THC (Terminal
Handling Cost) in Xiamen is 15% lower than the countrys average cost. Xiamen also charges less
than other ports for the container storage. The container charge in Xiamen is the lowest among all
China ports. We call at Xiamen partly due to the lower port charges, sometimes the port even
provide services free of charge for container storage
Xiamen Interviewee 5, a carrier Manager

The details of Xiamen port use charges are available on Xiamen official port website
(www.portxiamen.com.cn), including the carrier cost, agency cost, tug and pilotage,
cargo loading/unloading charges, man-hour rate, rental of boat, equipment, facilities and
other operations cost, domestic line carrier cost, lump sum for domestic container cost,
port construction fee, and port dues. They are also visible in the lobby of Xiamen Port
Services Building.
Shipping freight and overall cost were considered very important. Seven Xiamen
interviewees complained that port service costs are high, such as document change fee,
security fee, inspection charge, storage cost. The general understanding was that
Xiamens overall cost is high compared to other top ports, although some costs like
THC are low. As logistics cost includes a wide range (Section 3.2.3), it is very hard to
tell whether the cost is high.
In the Humber, 80% of the interviewees state that the local port charges are higher than
those of other ports. Humber Interviewee 1 complained that,
The dock charge in Hull and Immingham is much more expensive compared to other ports in UK.
Moreover, there is about 5% annual increase, which is unreasonable at the economy downturn.

Port users saw the high port charges as burdensome. The port users complained about
the cost, but they had no choice as some of them had long-term agreements with the
port authority. Some interviewees explained that the high cost was because the port was
purely privately owned with monopoly which resulted in no competition. Moreover, as
the manufacturer said, it was not easy to remove the factory to another place once it had
settled down. They had to accept the unfair charge.
Cost is a huge concern for port users, according to the interviewees. The Humber
interviewees commonly thought that the tariff-charges for dock use are expensive, but
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business wanted low cost, which is why the port users complained about the charges.
Consequently, many local companies would choose the southern ports rather than the
Humber ports and not so many vessels would like to call at the Humber ports. Cargo
interests not staying with the Humber ports has influenced the local port development
and the regional economy to some extent.
Another cost in the Humber is the business rate (taxes on using the port) which the
national government imposed and of which the Humber interviewees strongly
complained. Humber Interviewee 17 said,
The business rates are not fair. Many other companies like us are facing difficulties with the extra
cost because we are double charged. We pay according to agreement by tonnage to ABP, but VOA
charges us for a second time. Our main issue is cost now. ABP are increasing charges which make
us uncompetitive, and they increase the charge yearly, not allowing negotiation. This has made us
unattractive to customers and our biggest problem now is we are losing customers.

According to the interviewees and the desk research results, the Valuation Office
Agency (VOA, a UK government body) decided to levy business rates from port users
from April 2005 in some UK ports. However, it was not implemented until September
2008, when VOA started to instruct local authorities to issue long backdated and often
disputed rates bills. The bills were backdated over three and a half years, and the
demands could not have been anticipated or budgeted for by the companies concerned.
The unanticipated increases of cost have put 70 companies into serious financial
difficulties. The result could be business closures, redundancies and loss of investment.
The difficulty was explained by Interviewee 15, who said,
Some companies have massive bills, which will damage their business. P&O has to pay 5million
for business rate, Rix & Shipping has to pay 1.25m. They dont know where to get the money.

One interviewee from the local city council agreed that the rate was unfair to business;
however, the interviewee admitted that the local city council was not strongly involved
politically in this argument. The companies at the ports have been deemed to be legally
liable for tax, so they must pay what is due. Considering the difficulties businesses are
facing, the resolution is that businesses can pay the backdates over 8 years by instalment.
The finding that cost is a key factor that influences port performance is in line with
Murphy et al. (1991), Lirn et al. (2004), Tongzon and Heng (2005) and Tongzon (2009).
Lirn et al. (2004) find that handling cost for containers is the first criterion for both
carriers and port operators to consider when they choose a port. One interviewee notes
that carriers have the decision-making power among port stakeholders. The researcher
would argue that there must be some balance between the benefit of carriers and benefit
of shippers.
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The researcher could not obtain information on port charges from the port authority, as
the interviewees explained that they were not allowed to disclose the charges due to
confidentiality. However, the researcher identified the cost performance from other
interviewees like the Humber port users, who complained strongly about the expensive
port charges. The interviewees would not disclose how expensive or how unfair the
charges were, compared with other ports, but they knew that different rates applied to
different ports in UK and they were aware that different port users in the Humber paid
different rates. This is an interesting finding that Humber port cost is not transparent
while Xiamen port cost is transparent.
5.7 Logistics demand
As for logistics demand, which was backed up by the local economy and hinterland
economy, eighteen (90%) Xiamen interviewees strongly highlighted its importance.
They understood that logistics demand would be scant without the support of the
economy. A developed economy ensures sufficient cargo resources for the trade, which
makes the logistics demand high.
Six (30%) of the Xiamen interviewees noted that Xiamen had the obvious
characteristics of an export-oriented economic development model. By 2007, 80% of
the industrial output from the scaled companies had been created by foreign funded
enterprises (Huang 2009). Foreign invested companies have played a key role in the
rapid development of Xiamens industrial economy and logistics development.
Focusing on an export-oriented growth competitive strategy requires extensive port
rationalization for export-led success and attracting import investment (Airriess 2001).
The interviewees considered the export-oriented model as one of the factors that
improve port performance, as the output by foreign invested companies would be
exported via ports.
However, Xiamens local economy is not strong enough to support port development.
One interviewee noted that Xiamen GDP was ranked the 50th among Chinas top 70
cities in 2008. The interviewees highlighted that Xiamens local economy is weak. As
Interviewee 15, a logistics manager from manufacturing, said,
Xiamen is not an industrial city. Its manufacturing is poor. Even for exports, the main products in
Xiamen are light industrial products such as bags, clothes and shoes, which have low value. There
are few high-tech products here. The product range is narrow, which indicates that there is not a
variety of products from Xiamen to be shipped. The cargo value and volume cannot be very big.

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Some interviewees had concerns about the cargo types for trading at the Xiamen ports.
One PSP manager, Interviewee 1said,
One of the main products Xiamen transports is stone, which is heavy and has low value. Stone is
known as a non-reproducible product. Xiamen is the port to ship the biggest share of stones in China.
I dont know what would happen if Xiamen loses the stone shipment at the end of the day.

Some interviewees were also concerned about Xiamens hinterland economy. Xiamen
has a very limited and constrained hinterland that is Fujian Province, east of Guangdong
Province and south of Jiangxi Province. This is because Xiamen is stuck with
Hongkong and Shenzhen in the south, Shanghai and Ningbo in the north and Kaohsiung
to the east, which are known as international or regional container transhipment ports.
In the west, Xiamen is constrained by poor infrastructure and mountains. The lack of
logistics demand hindered port performance, as one interviewee said:
Xiamen ports hinterland is small. It is not like Shanghai or Shenzhen/Guangzhou which have vase
hinterland (YRD or PRD). River navigation provides cheap and convenient transport for the cargos
from the broad hinterlands to go to Shanghai or Shenzhen. Xiamen is separated from the inland by
mountains, and physical infrastructures are not in place to link the inland and Xiamen ports, which
has resulted in scant cargo resources.
Interviewee 18, a Marketing Manager of a 3PL

In 2008, Fujian GDP was ranked 12th and Jiangxi GDP was ranked the 19th out of the
31 provinces in China (www.stats.gov.cn), which shows the weak economy of Fujian
and Jiangxi. For Guangdong, although its GDP was first among all the provinces, most
of the cargoes go to Shenzhen or Guangzhou instead of Xiamen. Moreover, it is not
feasible to expand the hinterland to inland. On the one hand, the shippers would
consider Shanghai or Shenzhen for their import/export as they provide better services
with lower costs. On the other hand, the infrastructure connecting Shanghai or
Shenzhen/Guangzhou is much better than that connecting Xiamen.
However, although Xiamen does not have strong hinterland to support its port demand,
the trade between Xiamen (XM) and Taiwan (TW) supports Xiamens logistics demand.
In 2004, XM exports to TW were ranked No 5 of all the exports; TW exports to XM
were ranked No. 2 of all the TW exports (Chen et al. 2008).
According to Humber interviewee 3, the Humber catchment area had strong logistics
demand:
75% of UK manufacturing industry is in 4-hour drive from Humber ports, which provide rich
products for ports shipment.

A large amount of the logistics demand in the Humber actually comes from West
Yorkshire. This may be due to historical reasons that caused industry in the Humber to

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be different from that in West Yorkshire. The Humber estuary was a large fishing
industry base while West Yorkshire had numerous manufacturers.
According to a MDS and Regeneris Consulting report (2006), 56% of the imported
trade and 69% of the exported trade (average about 60% of the cargos handled in the
south) through the UK southern ports are actually from and to the northern region. To
relieve the pressure of congestion in the southern ports such as Felixstowe and
Southampton, the Humber ports can take over much volume.
The Humber interviewees noted that the main products transported here are coal, timber,
paper, ores and containers. The Humber ports had large potential logistics demand, as
Interviewee 19, one regional LSP director, stated,
We see a steady growth in the amount of freight coming into the northern port both in Humber and
Tees, because both land and access are better in the north than those in the south.

A government officer held a similar view. He learned from one consultant report that 60%
of the cargo shipped from the English southern ports are actually coming or going to the
three northern regions, which implies that the Humber ports had a great potential
opportunity to improve their logistics.
This section has confirmed the literature that regional economy influences port
performance (Song and Yeo 2004).
5.8 Logistics services
The quality and availability of logistics services such as customs and border inspection
service, logistics personnel skills and management levels, speed of cargo handling, port
risks, port safety and other services by LSPs were recognised as important factors for
port performance improvement. This section will address the findings on the service
elements one by one.
5.8.1 Customs and other border services
Customs service was highlighted by eighteen (90%) of Xiamen interviewees as a
critical factor to influence port performance. The interviewees acknowledged that
Xiamen customs service had somewhat improved. Big manufacturers such as Dell,
Xiahua Electronics Group and You Da Guang Dian, which enjoyed the green custom
channel, were happy with Xiamens customs services. Dell even claimed that they had
a very cordial relationship with Xiamen customs and cooperated very well with them.
Customs created and broke customs clearance records to satisfy Dells production in
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Xiamen. Border inspection is another service factor but is closely related to customs
services to improve port performance.
However, 16 (80%) of the 20 interviewees strongly asserted that Xiamens customs
service was poor, although they admitted that certain progress had been made. The
border agency requests more documents than in other ports, and more complicated
procedures are followed, which has caused slow customs process. The shippers
complained that the cost of custom was increased due to waste of time and human
resources. The following are examples:
The slow customs service has affected our companys efficiency.
Interviewee 1, a 3PL Manager
Lack of direct access to the customs from the companies makes the custom inefficient. In Xiamen,
only about 20 companies enjoy the green process to link Xiamen Custom. The advanced IT system is
unavailable to integrate the different organisations. Also, as the different departments do not
compromise with other departments on the standards, it is too difficult to integrate the system, which
also causes customs inefficiency.
Interviewee 6, a Manufacturer Manager
We are requested to provide more documents in Xiamen than in other ports. The customs officers
do not trust the shippers, which has driven shippers away from Xiamen.
Interviewee 15, a Manufacturer Manager

The researcher understood from the interviewees that Xiamen customs used to be very
stringent. They became strict after the 4.20 Case which was the biggest smuggling
case since the Peoples Republic of China was founded. About 600 important
government officers from different levels were involved in the case and were dismissed
from their posts, which had serious impact on Xiamen in various aspects. China lost
over 83billion RMB over the case. The interviewees thought that customs supervision
now is too strict and it has influenced the government work efficiency and slowed down
the development of Xiamen. According to the interviewees, the poor customs service is
a big problem that hinders Xiamens port development. This is not only a matter of
logistics development, but also a matter of politics.
The Humber interviewees did not highlight the importance of customs service, because
most of the Humber cargoes go to Europe. For cargoes from one country to another
within EU, customs is not necessary due to the duty-free trade. For cargoes to other
destinations, customs service is not a problem in the Humber, either. One interviewee
from a manufacturer said they declared customs and applied for customs clearance on
the website by themselves instead of contracting it to freight forwarders as Xiamen did.
To his understanding, the customs here is very efficient.
The empirical research finds that custom and border services in Xiamen are difficult
while the services in the Humber of UK are not an issue at all. The finding that customs
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service is important for port performance is consistent with the view of Tongzon (2007)
and Arvis et al. (2010) who assert the importance of customs policy. It is also found that
customs services in UK and China are quite different due to different historic, political
and economic contexts.
5.8.2 Skills
The Humber and Xiamen interviewees noted that logistics skills and management levels
are important for port performance. With the increasing logistics demand, the demand
for logistics personnel with skills and management expertise is increasing accordingly.
The management level plays an important role in logistics development. Whether the
policy is implemented efficiently and effectively depends on the ability of the
management team. For example, in the early 1980s, Shenzhen, Xiamen, Zhuhai and
Shantou were the first four open special economic zones by the Chinese government
and Xiamen actually had a better opportunity than Shenzhen. However, Xiamen has
developed much slower than Shenzhen for three reasons: the political relationship
between Taiwan and Xiamen; culture difference; and difference in logistics skills and
management level. This section will address the last reason.
Table 5. 2 Age profile for Xiamen logistics management team
Level

Below 22

22-35

35-45

Over 45

Junior

22.30%

69.80%

7.20%

0.35%

Middle

8.23%

62.45%

20.31%

8.68%

Senior

0.48%

24.56%

60.35%

14.61%

Source: Wang and Chen (2008)

Regarding the age of logistics personnel, the interviewee from Xiamen Logistics
Association noted that middle level management personnel are young and lack
experience, although senior management level are reasonably experienced in terms of
age. This is consistent with Wang and Chen (2008), as shown in Table 5.2.
As for educational qualification, most of the logistics personnel had qualifications from
colleges and universities. However, among senior level managers or directors, few
people held a Masters or doctorate degree, but they actually had commercial
experience which is more important than higher degrees. The finding is also consistent
with secondary data by Wang and Chen (2008), as shown in Table 5.3.
Most logistics companies in both the Humber and Xiamen are very small with less than
30 staff. According to the statistics provided by the Logistics Office of the Xiamen
Government, 70% of the logistics companies are small. Although some people have
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some knowledge about logistics planning, transport scheduling, warehouse management

and freight forwarding, their knowledge is biased. Most of them do not know current
logistics operations management, logistics system design and scheme, nor do they know
logistics information systems. Two interviewees noted that logistics training lags behind
and logistics skills are inadequate in Xiamen. At management level, the top levels do
not have much knowledge and experience as well, as logistics developed late in China.
Table 5. 3 Education profile for Xiamen logistics management team
Level
Junior

Doctor
0

Master
0

Undergraduate
78.86%

High school
21.12%

Below high school

0.48%

Middle

0.52%

1.28%

85.65%

12.65%

Senior

2.13%

6.76%

89.85%

1.25%

Average

0.88%

2.58%

84.89%

11.67%

0.39%

Source: Wang and Chen (2008)

In the Humber, according to Skills for Logistics (2009), the Yorkshire & Humber region
has around 215,300 employees (9% of the regional employment) working in the
logistics sector. The investigation shows that there is a pressing need to improve levels
of literacy and numeracy skills within the Humber logistics workforce. In terms of
qualification, 52% of the workforces are below National Vocational Qualification
(NVQ) Level 2, 14% have attained NVQ Level 2, and 33% are above NVQ Level 2.
The report also shows that leadership and management skills need to develop across the
sector to improve port performance.
Ten other interviewees held a similar view that this region lacks skilled people in
logistics. The Humber regions skills are below the national average. Skills for Logistics
are trying to promote high level of management skills and considering catching people
at younger ages to ensure that logistics are basics in their career.
Skills and management capability were identified as important, although both The
Humber and Xiamen lack the logistics personnel with skills and expertise.
5.8.3 Speed of cargo handling
Sixty per cent of Xiamen interviewees and fifty per cent of the Humber interviewees
held the view that speed is very important in logistics services. Interviewee 13 said,
Speed of cargo handling is critical. As the increasing scale of vessel size requires faster ship
loading and unloading. The number of terminals is fixed. If the speed is slow, the ship would occupy
the berth longer, which will delay the next vessel calling. If such cases happen frequently, the
carriers would seek for other ports to call rather than wait.

Interviewee 11 said,

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Yantians operations efficiency with high speed has saved much time for the port and carriers,
which has resulted in bigger profit for the port and carrier.

Speed of cargo handling is an important service factor. It could contribute to port

efficiency at the vessel calling, departure and cargo movement. Speeding up handling
can fasten the total loading/unloading speed and shorten the vessel stop time at the port.
5.8.4 Risks and safety
Sixteen (40%) of 40 total interviewees realised that risk (such as congestion, delay) and
safety management were explicitly important for port performance. Some interviewees
in Xiamen highlighted safety for long distance drivers, as most traffic accidents
happened because of tired drivers. Due to time constraints, they did not explain the
importance in detail. Although there are legal restrictions for drivers to take a break of
20 minutes after every four hours in China, in many cases, the regulations are not so
well implemented as in UK. The interviewees understood risk and safety as a common
sense of obvious and critical importance.
5.8.5 Services by logistics service providers
Both the Humber and Xiamen interviewees recognised the importance of services
provided by LSPs, and they are happy with the services of warehousing, freight
forwarding and cargo handling.
Interviewees from the two port regions acknowledged that logistics services such as
customs, speed, skills, risk and safety management are important for port performance.
The finding is in line with Murphy et al. (1991, 1992), UNCTAD (1992) and Tongzon
(1995).
5.9 Port ownership
Port ownership was found to be important to influence port performance. Six (30%)
interviewees pointed out that Xiamen port services had improved greatly in the past 20
years, partly because diversified port owners, multiple port operators and port managers
had replaced the complete monopoly of port owner, operator and service provider.
Xiamen ports used to be a state-owned monopoly. Nowadays, there are 11 port
investors and 9 port operators, including the government agency, Maersk and Huchison.
The multiple investors and operators actually contribute to improve services due to
competition, according to the interviewees.

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Xiamen ports have experienced the process of moving from an exclusive "complete
monopoly" by the government to "oligopoly" by diversified ownerships. Taiwan has
invested in a liquid chemical port; state-owned-enterprises such as Xiangyu Group,
Guomao Group, Jianfa Group have treated the terminal construction and operations as
their main businesses. Private enterprises such as Haiao Group are also involved in port
ownership; the well-known international shipping line Maersk has 50% ownership of
Songyu Terminal; Hutchison Port Holdings, the well-known international port operator,
has gained 49% Xiamen International Terminal ownership.
The interviewees raised their concerns on operations diversification. The number of
Xiamen investment entities and the regional oligopoly are growing in a non-rational
direction, resulting in dispersion of port supporting services as well as the low
efficiency of port operations due to a waste of resources. This has highlighted the
absence of competition norms and rules. The irrational pricing strategy has become the
main means of competition, which has made the port managers and the state-owned port
operators unable to coordinate and balance the competition. Thus, the bargaining power
of the main terminal operators against the shipping companies has weakened year by
year. Consequently, the terminal operations benefit has been continuously low, and it is
difficult for the terminal to invest in the port capacity and improve integrated services.
In the Humber estuary, the Association of British Ports (ABP) is an independent,
municipally owned company responsible for the planning and maintenance of the port
as well as tugging and dredging for the Humber ports. The Humber interviewees noted
that due to monopoly, the port users did not have power against the port owners. The
monopoly was considered unhealthy for port development. For example, ABP have
problems with investment in the lock gate, coal terminal and container terminal, which
needs big investment. As ABP is the sole owner of the ports, the investment is difficult
to secure unless ABP is sure about the return.
The finding that port ownership would influence port performance is consistent with the
claim of Borger et al. (2008). Further discussion will be given in Chapter 7.
5.10 Environmental concerns
In the Humber estuary, the main challenge facing the ports is to accommodate
competing development pressures while safeguarding the internationally important
environment of the estuary, because the Humber is a very healthy estuary that is
important for nature conservation. Wildlife and birds here have international importance.
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Large parts of the estuary are designated as nature reserves and are managed to maintain
and enhance the bird interest. The estuary is healthy and there are many Nature
Conservation areas and important Nature Reserves in and around it. That is why there
are restrictions on land use. Interviewee 4 said,
The restrictions have prevented many potential customers coming, hence impacted the development
of the ports. Its expensive to develop a new plant nearby and it is too difficult to get approval for the
project, it may take 2-3 years just for approval...The objections can come from any stakeholders.

When a new port project is proposed, some stakeholders oppose it because of the
potential impact on environment. For example, when Quay 2000 was proposed as a new
container terminal, it was opposed by the key stakeholders: the Environment Agency,
English Nature and the Wildlife Trust.
The Humber interviewees were aware of the environmental influence caused by
logistics and they were concerned about the environment and emission reduction. They
try to reduce emissions and develop green transport by promoting public transport,
promoting a modal shift from the car and promoting the movement of goods by water
and rail. The interviewees suggested that logistics need better environmental legislation.
Together with English Nature, the Environment Agency and the Wildlife Trust, ABP
has provisionally identified the waterfront developments at each of its Humber ports for
wildlife in response to the designation of nature reserves and recent environmental
legislation and proposed port developments. The Humber estuary is expected to meet
environmental and resource goals while serving the growing UK trade. The
environmental relevant bodies highlighted sustainable development needs.
In China, there is increasing evidence that people are concerned about the environment,
although China is still at the developing stage. For example, Xiamen rejected the PX
project that had over 10 billion RMB investment and would bring output of 80 billion
RMB a year. The project was rejected because of environmental concerns. As the
distribution may have some negative externalities on costs and benefits, such as
pollution. Some incentives have been promoted to reduce the negative externalities. For
example, renovation of port machinery and equipment has been promoted to change
from fuel-driven into power-driven to address environmental concerns. In January 2009,
China introduced a fuel tax to match the international standards on fuel price, which is
conducive to energy-saving and emission reduction. The economy and environment
need assessment to keep a balance or make compensation. With government support,
China has promoted energy-saving and emission reduction technology, advanced ship
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technology, and encouraged the development of inland navigation, especially in the

Yangtze River.
That environmental concerns influence port performance is the new finding with the
promotion of environmental protection.
5.11 Politics
Politics is recognised as one factor that influences port development. Xiamen has long
been regarded as a city more important politically than economically. Most interviewees
considered that Xiamens development largely depended on mainland Chinas political
relationship with Taiwan. They held the view that the politics in Xiamen was not stable,
which hindered the development of Xiamen port performance for quite a long time. This
is also the reason why Xiamen had not developed so well as Shenzhen and other cities.
The FDI investors had some concerns about the stability of politics, which caused many
investors to prefer not to invest in Xiamen.
The current poor landside links to the hinterland are to some extent due to political
issues. Xiamen is very politically sensitive towards Taiwan while Taiwan is significant
to the mainland China both economically and politically. When the relationship was
tense, the transport infrastructure was not developed and port performance was poor;
when the political relationship was improved, port performance became better.
The idea that political stability influences port performance is supported by the evidence
of recent Xiamen-Taiwan relationship. In the mid 1990s, Xiamen hardly developed due
to the tense cross-strait political relations. As Xiamen lacked the necessary logistics
support from Taiwan when Taiwan transferred its first run of manufacturing to
mainland China, Xiamen retained its poor port performance status. The Taiwan
businessmen, who had come to Xiamen earlier due to kinship, have disappointed and
left Xiamen for other cities, such as Dongguan and Kunshan.
When Shuibian Chen, the representative of the DPP (Democratic Progressive Party,
Taiwan), was in power for eight years (2000-2008), an ideology of extreme
manipulation, including radical "Taiwan independence" and a narrow populism,
prevailed in Taiwan. Chens policy provoked mainland China and undermined crossstrait relations.
The literature has hardly addressed politics in port performance development. Although
Tongzon (2007) and Lirn et al. (2004) mentioned that political stability was one
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determinant of competitiveness in logistics, they did not include this determinant in his
empirical research. The current finding supports Tongzons view that politics is
important for port performance and it enhances the literature by empirical analysis.
5.12 History
History was identified as a factor that influences port performance, as explained by
Interviewee 10,
The Humber and West Yorkshire have different sectors to support the local economy. It is probably
because of the different historical industry in the two areas. The Humber estuary was a large fishing
industry base while West Yorkshire has a long history of manufacturing. Teeside has a history of
steel making while the Humber estuary has a chemical and oil focus in relatively recent times

In the middle ages, The Humber developed as ports to export lead, grain, coal and wool
to northern Europe and to import cloth, oil seed, iron-ore, timber, wheat, hemp and flax
from the Netherlands, the Baltic, Sweden, Riga and Norway (YF 2008)). Timber and oil
seed have continued to be major imports through the port of Hull to the present day. The
estuary used to be prosperous due to trade. However, it suffered a trade decline during
the British Civil Wars between the 16th and 17th centuries. Later on, the increasing
trade was backed by the agricultural and industrial developments in Yorkshire and the
East Midlands in the 18th century, when the whaling trade rose. Then the Humber
experienced its period of greatest prosperity until the First World War.
The estuary declined in the 1920s and 1930s because of overproduction in the fishing
industry and suffered the heaviest bombing second to London during the World War II.
Consequently, the smaller and older docks were closed. The main loss of the Humber
estuary was the fishing industry, which collapsed in the 1970s after the Cod Wars
with Iceland (Teed 1992). However, many old industries which originally developed in
Hull are still here, including pharmaceutical firms Reckitt Benckiser, Smith & Nephew,
and millers Maizecor. The port of Hull is still a major importer of timber from northern
Europe after over 700 years and the Humber estuary is still home to the largest fish
market in the UK.
As historically this area was not a manufacturing area, the Humber does not have many
local cargoes to support the trade and logistics demand. This explains why the Humber
does not have much cargo volume. However, as a quarter of UK areas are within 4
hours drive of the Humber, the Humbers hinterland is large enough to support the
ports potential logistics demand.

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Xiamen started as a port in the Tang Dynasty and has a long history. In the late Ming
and early Qing Dynasty, a large maritime trade team, founded by Chenggong Zheng,
enabled Xiamen to start and complete the first historic voyage by ship to Southeast Asia,
which led China to the world.
After the foundation of the PRC, Xiamen started serving the military, falling far behind
the other coastal ports as a regional small port. In 1973, Premier Zhou Enlai called for
change the port profile within three years and proposed that Xiamen would become a
commercial-based port. Since then, large-scale port construction started. In 1981, under
Chinas reform and open-door policy, Xiamen was nominated as one of the five special
economic zones in China and became the biggest port enjoying the special zone policy.
Xiamen was pushed to the forefront, made to open to the world again and entered a new
stage of development. After experiencing ups and downs, Xiamen has become an
important trade port on the south-eastern coast of China. History witnessed changes in
port development. China did not start container business until the 1970s and Xiamen
started to transport containers in 1983. During 2000-2005, Xiamen experienced rapid
development.
The history of Xiamen and the Humber port development show that history builds up
the port facilities and the relevant sectors generate logistics demand. The researcher
would conclude that history is an important factor that influences port performance.
5.13 Culture
Apart from the historical reason, the unsatisfactory customs service in Xiamen may be
explained by socio-cultural factors. People who work for the customs are known to have
an iron rice bowl, which means a permanent income they would never lose whether
they work hard or not, their jobs are secured whatever their job quality is. Employees in
these positions are like the people who used to work in the China state-owned
enterprises (SOE). They do not care much about the services. To their understanding,
they work for the country and not for themselves, so they do not work proactively. They
lack the sense of service, because they get the same salary whether they work hard or
not, whether the organisations achieve profit or suffer a loss. Lack of a sense of service
has existed long in China due to the state-owned mechanism. Although China has
changed sectors from state-owned to private-owned for about 30 years, the lack of
service sense still exists in many peoples ideology. This is particularly true in the
public sectors, like customs and government departments.
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At the beginning of Chinas reform, Xiamen had a better opportunity than Shenzhen to
develop its economy and port performance. However, the fact is that Xiamen fell far
behind Shenzhen. In the 1980s, Taiwans manufacturing developed very fast from
labour-intensive textile industry and capital-intensive petrochemical industry to
technology-intensive industry. The manufacturers had a huge transfer from Taiwan to
mainland China under Chinas open door policy and the great pressure of appreciation
of the New Taiwan dollar. Compared with the opportunity provided by Hongkong to
Shenzhen, what Taiwan brought to Xiamen were not only trade orders but also a
complete industrial chain, which had a strong demand for localization procurement and
human resources. Moreover, Hongkong is a free trade port relying on transit cargoes
and Shenzhen was just one of Hongkongs cargo hinterlands, while Taiwan did not have
many exports and Xiamen was almost its only destination for its industry transfer.
The slow development was attributed largely to the Xiamen leisure culture and not
appreciating change, Xiamen interviewee 11 said,
In the early 1990s, when Shenzhen engaged in economic development, Xiamen engaged in policy
argument. Due to fear of risk, Xiamen dared not stand out. After 2000, Xiamen was decimated and
ever lost the opportunity to compete against Shenzhen. Many people know the meaning of (min,
short term of Fujian Province). It is a dragon when it goes out of the door, but it is a worm when it
remains inside. Xiamens culture made it choose to sit back and wait for opportunity, thats why it
cannot get the opportunity to become a dragon.

Xiamen culture is symbolized by the tea culture. Xiamen is a unique God-given Natural
Liveable City with a beautiful environment and pleasant weather. It enjoys a name as
"the city on the sea, the sea in the city." Most of Fujians rich end up buying properties
in Xiamen and enjoy the tea culture. The researcher observed many teashops and
teahouses, which best reflect the character of the city's comfort. As a cultural centre of
southeast China, Xiamen cultivated the habit of drinking tea. Although there are no
specific statistics, Xiamen's "leisure economy" is much stronger than that of most other
cities. The researcher herself experienced the tea culture when she collected data from
the field. Twelve interviewees made tea and offered it to the researcher in a very skilful
and leisurely way during the interview and face-to-face questionnaires.
Other than the tea culture, Xiamen culture is essentially a kind of immigrant culture.
Xiamens leisure culture is related to the cultural heritage. Historically, people moved
from the Central Plains in the 4th century (Jin Dynasty) and the following 800 years, to
escape from the wars. They still kept the farming culture that values the relationship
between man and land, because farmers cannot easily leave the land. On the other hand,
as they had to make a living in a new environment, they do not lack fighting genes.
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Most residents settled down in Zhangzhou and Quanzhou. People in Zhangzhou

emphasized agriculture, hating to leave their native land. People in Quanzhou had the
limited land for survival and had to seek new living space through emigration.
Quanzhou residents had to go out by sea to make a living due to the lack of fertile soil,
and so a maritime culture was formed. Many people went to Southeast Asia, including
Taiwan, the Philippines and Malaysia. They were the earliest people to accept
commercial and cultural enlightenment. This is how the commercial risk awareness was
integrated into partial Xiamen culture.
In such a cultural background, Taiwan and Xiamen formed a special business
relationship intentionally or unintentionally. In Xiamen, the majority of Taiwan
companies are small and medium enterprises. They came to Xiamen because of kinship,
so they do not require a special investment environment but rely on convenience related
to their kinship. As the ecosystem is relatively stable, economic vitality continues today.
In the late 1990s, such big companies as BenQ and Asus grow up with globalization.
They had new company values and paid more attention to non-kinship factors such as
cheap land, cheap labour and better industry supporting facilities. Thus they went to
Dongguan, Kunshan where there was a better investment environment. As a result,
Xiamen is no longer a place for them to realize their business dreams.
The confrontation between immigrant culture and farming culture, the collision between
farming and maritime cultures, the coexistence of contradictions in comfort and struggle
constitute the character of Xiamen citizens. This contradictory character is reflected in
the 30-year history of Xiamens economic reform and opening up, and also reflected in
the transfer routes to undertake foreign investment. However, the main stream of
Xiamen culture is a leisure-driven instead of profit-driven economy.
An interviewee gave a typical example reflecting Xiamens culture. The Xiamen
government spent years in getting the PX project sanctioned by the State Council. After
its final approval in 2007, the project was supposed to be built in Xiamen. It was the
largest ever project (13.7billion RMB) approved in Xiamen. This project was expected
to bring enormous business opportunities and dynamic economic growth to Xiamen.
The expected annual production value was estimated equivalent to two-thirds of the
entire Xiamen GDP. However, a university professor led a boycott against the PX
project. Eventually, this project was refused due to environmental pollution potential.

170

The Xiamen culture is quite different from that of Shenzhen. Shenzhen is a completely
new city with a culture of "time is money, efficiency is life," while Xiamen has a lot of
historical heritage and it needs the process of change. The city has pursued
transformation by advantages of land, finance and taxation, manpower, industry and
business services.
5.14 Other factors to improve port performance
According to the interviewees, some other factors also influence port performance, such
as unbalanced containers due to unbalanced trade, port image, social community
interruption and a nearby competitor.
One challenge the Humber region is facing its weak image. Most of the interviewees
agreed that the regional profile is a big problem. They thought the Humber estuary was
very poorly known, as Interviewee 8 said,
I have been to many countries in the world. When I tell people where I am from, nobody seems to
know the Humber. The image should be raised as a marketing strategy.

As for unbalanced containers, there is a vast amount of empty containers due to much
more export than import in Xiamen, while the Humber ports are facing the problem of
more imports than exports. The unbalanced trading has been a big problem for many
countries which results in high logistics cost. Interviewee 19 explained,
There is serious imbalance of Xiamen import and export (the ratio of exports and imports value is
close to 2:1), together with the low value of exports. The containers for imports cannot meet the
needs of export shipping. Xiamen has to call in large quantity of empty containers, which virtually
increases the logistics costs and reduces the port's competitiveness.

In order to encourage more imports, the Xiamen government has decided to offer
subsidies to the companies that import ten resource materials such as farming, foresting,
fisheries and mining. This is another form of government support.
Another factor that influences port performance is local community interruption. For
example, when Hull applied for the new Quay 2000 Project, the residents near the ports
area were against the plan for a new container terminal as they had concerns about the
potential impacts on their future life, such as more noise, and environmental impact.
Apart from the factors addressed, a nearby competitor has been identified to influence
Xiamen port performance. Quanzhou, being close to Xiamen, is targeting developing a
container port by huge investment. Interviewee 9 explained,
Transit cargoes from Quanzhou now account for 35-40% of Xiamen throughput. When Quanzhou
and other nearby ports manage to handle container cargoes, Xiamen will face big challenge and risk
for developing a transhipment port.

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5.15 Chapter summary

Based upon in-depth interviews undertaken in the first research phase, this chapter
addressed a number of findings identified from the empirical research. The findings
provide an unambiguous view on the factors that influence port performance from port
stakeholders perspective, in both UK and China ports context.
Geographical location, government support, logistics demand, physical infrastructure to
link ports with hinterland, port infrastructure, information communication system,
customs service and the port services provided by logistics service providers, logistics
cost, political stability, port ownership were all identified as important factors that
influence port performance. These findings are in line with literature addressed by
Murphy et al. (1991, 1992), Song and Yeo (2004), Gordon et al. (2005), Notteboom and
Rodrigue (2005), De Langen et al. (2007), Tongzon (2007; 2009) and Arvis et al. (2007;
2010). Both the Humber and Xiamen have a positive reputation for some factors, and
some negative factors, and for most factors they have different performance from the
interviewees perspectives.
Both regions boasted of their risk management and safety management, which would
ensure the efficient operation of port performance. Both regions showed dissatisfaction
with their regional logistics skills that are below the average level nationwide. They
generally felt somewhat disappointed about their logistics infrastructure as well. To put
this more specifically, the port technical infrastructure in the Humber ports is not
satisfactory and physical infrastructure to link the ports of Hull and Immingham is
disappointing. However, the Humber interviewees acknowledged that their information
system is good. In Xiamen, the port facilities are satisfactory but the physical
infrastructure to link ports and the hinterland is very disappointing, and the information
system is not effective and efficient enough to support the customers requirements.
Among those factors on which the two regions have different performance, navigation
depth, government support, customs service, logistics cost, and logistics demand are
typical examples. While Xiamen has around 100 shipping lines connecting Xiamen and
major ports worldwide, the Humber mainly have shipping lines connecting Europe as
feeder ports due to lack of deep water. Xiamen ports have gained government support
very positively from infrastructure investment (on technical, physical and information
systems), and preferential policy on tax exemption or reduction. The Humber ports

172

cannot get very positive support, a problem reflected in slow project approval, lack of
infrastructure investment and high business rate.
Regarding customs service, Xiamen port users complained about the complicated
documentation and cumbersome procedures while the Humber has no such concerns
because of its efficiency or because it is not a necessity for European-European trade.
Customs service is also the reflection of political issues. For logistics cost, Xiamen port
charges are comparatively better assessed than the Humber whose charges were
strongly criticized by the port customers. Regarding logistics demand, Xiamen
interviewees expressed strong concern on the lack of logistics demand due to the weak
local economy and small hinterland, while the Humber has some potential logistics
demand which can be attracted to the Humber ports if port facilities are available.
This chapter has also identified some other differences in the factors between the two
port regions. For example, the business rate was raised as a big issue in the Humber
estuary while there was no complaint on this in China. Politics is an issue that hinders
Xiamens port performance, especially the relationship with Taiwan, while in the
Humber stable politics is not an issue in relation to continental European. Xiamen is
important to Taiwan more politically than economically. Politics and environmental
concerns have influence on port performance. These are new findings of this research
with empirical evidence.
Some new themes have emerged from the empirical research. 1. Customs efficiency has
seldom been addressed in empirical research as an important factor that influences port
performance, although it is mentioned in the literature and reports by the World Bank.
The finding from the current research shows that customs efficiency plays a key role to
influence port performance in Xiamen. 2. Logistics demand was hardly highlighted in
previous empirical research as an important factor that influences port performance;
however, this empirical research has found that it is strongly highlighted as a very
important factor. 3. Port ownership in the Humber has hindered the development of port
performance due to monopoly in terms of service provision and port charges. This
finding is consistent with Tongzon and Hengs (2005) finding. 4. Politics,
overinvestment and inadequate logistics scheme have been little investigated in
empirical research from the perspective of development of port performance, nor were
they profoundly addressed in the literature. This empirical research has found they are
important to influence port performance.

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Port services in China are not as strong as those in UK. This might be because Chinese
ports lack a sense of service due to the influence of a long history of iron rice bowl
(secure employment, a lifelong secure job or position). Infrastructures (including
transport infrastructure, port facilities, natural endowment and technical and information
system) are all important, but intermodalism is not available and waterways have not
been promoted as expected in both UK and China.
The above findings have shed light on factors that influence port performance, which
either enhance, extend or complement the literature by persuasive evidence from this
empirical research. Building on the presentation and discussion, this chapter
summarised and highlighted a number of main themes from the empirical research. In
order to validate the above findings, analysis of questionnaire surveys will be elaborated
in the following chapter. Further discussion will be presented in Chapter 7.

174

6. FACTORS INFLUENCING PORT PERFORMANCE: PORT

STAKEHOLDERS VIEWSQUESTIONNAIRE ANALYSIS
This chapter presents the findings of the questionnaire survey. It summarises the results
of questionnaire surveys of 254 port specialists whose views were sought on the
importance of 15 factors that influence port performance and their evaluations on their
focal ports and other ports performance regarding the same 15 factors. In particular,
this chapter addresses the research objectives that were described in Chapters 1 and 4. It
also describes the sample characteristics, the distribution of responses and the reliability
and validity of key factors.
To this extent, the chapter consists of eight sections. Following the introduction, the
first section explains the data screening and data cleaning. This section also describes
the sample characteristics including the response rate and non-response bias. The
second section justifies the techniques chosen for data analysis in this study. The third
section provides descriptive statistics on the responses and will consider the distribution
of responses for each factor. The fourth section reports factor analysis to extract
aggregate factors from the 15 questionnaire factors. This section also tests the
reliability and validity of a number of key factors and measures their internal
consistency and convergent validity.
Based on the questionnaire factors, the fifth section applies a range of statistical
methods to investigate the relationships between different factors and address the
research objectives. The main analysis is focused on comparison for both combined data
and separate data. Comparisons are firstly conducted in the perspectives of importance,
performance, performance differences between case ports and other ports, and
differences between two regional performance differences in turn. Mean differences are
firstly given, followed by significant/insignificant tests between different regions.
Secondly, importance-performance analyses are conducted, including traditional IPA
(explicit importance vs. explicit performance) to identify urgent factors, revised IPA by
gap analysis (explicit importance against explicit performance difference between case
ports and other ports) to identify salient factors, and revised IPA by employing 3-factor
theory (explicit importance against implicit importance) to identify basic factors.
Thirdly, differences between respondent groups are investigated in terms of factor
importance and factor performance.

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The sixth section presents the respondents replies to the open questions. The last
section provides a summary of the chapter.
Figure 6.1 shows the structure of the data presentation. Analysis was conducted with the
aid of the technique software of SPSS 17.0, which is simple, interactive and rich in
alternative methods of data analysis (Shannon and Davenport 2001).
Data cleaning and validity

Descriptive statistics
(mean, SD, Skewness, kurtosis, correlation)

Factor analysis

Other ports performance

comparison
(HBs Op vs. XMs Op)

Performance comparison
(Humber vs. Xiamen)

Importance comparison
(Humber vs. Xiamen)

Importance-performance
analysis (HB + XM)

Performance difference
(HB + XM)

Company group difference

(imp. + perf. Rating HB + XM)

Perf. dif. Comparison

(HB vs. XM)

Open questions and

combined analysis

Figure 6. 1 Chapter structure

6.1 Data screening, cleaning and sample characteristics

6.1.1 Data screening and cleaning
In order to ensure the accuracy of questionnaire data analysis, the researcher screened
and cleaned the data prior to data analysis. The categorical data, continuous data and the
errors in the data file were checked. Correction was made when an error was found.
The missing data were then checked. According to Hair et al. (2010), cases with over 50%
missing data should be deleted. Nine such poorly completed cases were excluded to
reduce the incidence of missing data in statistical analysis, which could affect the
reliability of the results (Gill and Johnson 1997). As the three parts of the questionnaire
were independent sections, the missing values were treated separately.

176

Hair et al. (2010) claim factors with over 15% missing data should be deleted. No such
factors were detected. The missing values were scattered randomly through the data
matrix for Section A and Section B. They were not a problem in these two sections, as
they only accounted for less than 3% of responses, given the large sample size. These
missing values were replaced by mean values by employing the complete data approach,
which is best used when the sample size is large and missing data level is low (Hair et al.
2010). For Section C, some respondents were not aware of the performance of other
ports, so they did not answer Section C but provided complete answers to Section A and
Section B. In such cases, Section C was considered invalid but the other parts were
treated as valid.
Based on the data cleaning and data screening, 92 out of the 96 Humber responses and
162 out of the 167 Xiamen responses were found valid for data analysis of Section A
and Section B; 78 responses from the Humber and 128 responses from Xiamen were
found valid for Section C data analysis. Thus, 254 cases in total were used for data
analysis involving Section A and Section B, and 206 cases in total were used for
analysis involving Section C.
After checking the missing data, Boxplot diagrams by SPSS Statistics Explore were
extracted to detect outliers. Less than 0.9% of the data were identified as outliers. When
the outliers were confirmed, to avoid response bias and avoid the risk of losing
generalisability, it was decided not to remove cases. The researcher decided to change
the score to less extreme data as suggested by Field (2005) and Hair et al. (2010). As the
percentage of outliers was very low, changing outliers to less extreme data did not
interfere with the findings of the research to any major extent. The data after outliers
treatment were used for data analysis.
6.1.2 Sample characteristics
As presented in Chapter 4, the questionnaires were distributed to specialists in the
Humber estuary (UK) and Xiamen (China) respectively. In the Humber, 200
questionnaires were distributed and 92 out of the 96 responses were found to be valid
(valid response rate=46%), while in Xiamen 300 questionnaires were distributed and
162 out of the 167 responses were identified to be valid (valid response rate=54%). The
total valid response rate was 50.8%. Table 6.1 presents the response rate by region. The
questionnaires

were

distributed

to

five

types

of

companies,

including

consignors/consignees, PSPs, shipping lines, port managers and other port stakeholders.
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Table 6. 1 Questionnaire distribution and response

Region

Number distributed

Responses received

Valid responses received

Valid response rate

Humber

200

96

92

46%

Xiamen

300

167

162

54%

Total

500

263

254

50.80%

Table 4.7 presents an overview of response rate by company type and region. In total,
51 responses (20.08%) were from consignors/consignees, 62 responses (24.41%) were
from PSPs, 32 responses (12.6%) were from shipping lines, 49 responses (19.29%)
were from port managers and port operators, and 10 responses (3.94%) were from other
port stakeholders. Another 50 responses (19.69%) did not disclose their company name
so they could not be simply included into any company type but were treated as missing
data. The composition of the sample by type of organisation shows that company
selection was devoid of demographic bias and the response rate in the two regions was
very good, with approximately equal response.
Figure 6.2 presents the response profile by company type frequency and percentage
with combined data of the Humber and Xiamen. The bar chart gives the number of
respondents while the pie chart shows the percentage of respondents in each group.

Figure 6. 2 Respondents profile by company type over all responses (combined samples)

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Figures 6.3 and 6.4 present details of the response frequency and percentage by the
Humber and Xiamen separately.
Humber
40
30
20
10
0

33

29

25 26

Xiamen

20

24 25

12
2
shippers

forwarders

carriers

port
Other
managers stakeholders

Figure 6. 3 Respondents profile by company type and region (frequency)

Humber
2.20%
27.20%

26.10%

shippers
forwarders
carriers
port managers
Other stakeholders

13.00%
31.50%

Xiamen
7.10%

23.20%

22.30%

17.90%

shippers
forwarders
carriers
port managers
Other stakeholders

29.50%

Figure 6. 4 Humber/Xiamen respondents profile by company type and region (%)

Table 6.2 presents the respondents job positions. Most of them held senior positions in
their organisations. 49 (19.3%) of them were directors, 125 (49.2%) of them were
managers, including branch manager, general manager, shipping manager, terminal
manager, transport manager, operations manager and the remaining 26 (10.2%) held
other titles, such as principal consultant, master, and other port experts. 54 (21.3%)
respondents did not disclose their positions. Among the 200 respondents who disclosed
their job positions, 87% of them were directors and managers. This reflects that the
respondents were in the right position to complete the questionnaire and provide useful,
valid and insight responses.

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Table 6. 2 Respondents by job roles (combined samples)

Job title

Frequency

Percent

Cumulative Percent

Directors

49

19.3

19.3

Managers

125

49.2

68.5

Others

26

10.2

78.7

Missing

54

21.3

100.0

Total

254

100.0

Figure 6.5 presents the frequency and percentage details of respondents job position.

Figure 6. 5 Frequency/% of respondents with different positions (combined samples)

In terms of questionnaire response method, Table 6.3 and Figure 6.6 show that the
majority of participants (172 and 67.7% of the total 254 respondents) responded with
self-completion, mainly via email, supplemented by post or fax. The remaining
respondents (82 with 32.3% of the total 254 respondents) responded by face-to-face
survey.
Table 6. 3 Respondents by response method
Response method

Frequency

Valid %

face to face survey

82

32.3

self-completion by email, post and fax

172

67.7

Total

254

100

The self-completion respondents preferred to complete the questionnaire without

disturbance in their own time, as they felt it more comfortable to do so. The face-to-face
survey respondents thought it easier and more efficient to complete the questionnaire in
the researchers presence, so that they could clarify the questions with the researcher if
they had some concerns or if they were not clear about the questions. Some respondents
explained their willingness to offer comprehensive data for this research if needed.

180

Figure 6. 6 Response method (combined samples)

Non-response bias
Non-response bias may arise when the characteristics of the respondents vary
significantly from those of the non-respondents. It can be a problem when response rate
is lower than 40% (Lambert and Harrington 1990). The bias may occur even when the
response rate is high (Carter and Jennings 2004). This is why it is necessary to test the
non-response bias, even though the response rate of the current study was over 40%.
Armstrong and Overton (1977) consider that later respondents have similar views to the
non-respondents, as they respond due to additional stimulus. They assume that nonresponse bias does not exist if no significant differences exist on the survey factors
between the early responses and late responses. Thus, this research tested the difference
to examine the potential non-response bias problem by following the recommendation
of Armstrong and Overton (1977) and Rada (2005).
The non-response bias was checked by the Mann-Whitney U test and the KolmogorovSmirnov (K-S) Z test of the SPSS software, as they are most popularly used to test
whether two independent samples come from the same underlying population (Pallant
2007). In this study, the first and last 40 respondents were compared to assess the
potential non-response bias for both the Humber and Xiamen separately. The results
revealed no significant differences between the early and late responses, as all p-values
were greater than 0.05, meaning that the means of the groups were not significantly
different. Therefore, the tests confirmed that the results emerging from the data would
be valid and devoid of chance.
This research also compared the number of respondents with the number of sampling
frame by different respondent groups from different types of companies. The response
rates were not equal. The general response rate of the Humber (46%) was lower than
181

that of Xiamen (54%), and the response rates for different groups were not the same
(Table 6.1 and Table 4.7).
Table 6. 4 Abbreviation and item explanation
Symbol

Abbreviation

Stand for

Section A, importance

Section B, performance

Section C, performance of other ports

1-shipping services

shipping services

2-shipping prices

shipping prices

3-portcharge

port charges

4-feeders

Feeders

5-overall cost

overall cheapest cost of logistics services

6-handlingspeed

speed of cargo handling

7-risks

port risks

8-safety

port safety

9-techinfras

port technical infrastructure, e.g. equipment and ICT

10

10-proximity

port location to the customer and supplier

11

11-skills

logistics skills for those working in port performance

12

12-landlinks

landside links, including air, rail and road

13

13-logservices

logistics services, e.g. Warehousing.

14

14-govs.upport

government support

15

15-navigation

depth of navigation

16

16-portservc

port services (A-factor)

17

17-logsupt

logistics support (A-factor)

18

18-cost

logistics cost (A-factor)

19

19-shipservc

shipping services (A-factor)

20

20-others

Other factors (A-factor)

A1-A15

A1-shipservices to A15-navig.

importance of factor 1to factor 15

B1-B15

B1-shipservices to B15-navig.

performance of factor 1 to factor 15

C1-C15

C1-shipservices to C15-navig.

other ports performance of factor 1 to factor 15

(C-B)

Perf. Diff. (C B)

performance difference between other ports and selected port

XM

Xiamen

HB

Humber

A-Factor

A-factor

aggregate factor

However, differences in response rates were generally very small and were often
influenced by the fact that some categories had only a small population. For instance,
the response rate of Humber PSPs was 48.3%, which is higher than that of other
Humber port stakeholders (40%). This is because the sample of other port stakeholders
consisted of just five important government agencies, academics and consultants. This
applies to a sample of 60 PSPs, of which 29 responded. Similarly, response rates of
Xiamen are generally lower than those of the Humber. 16.7% of the Xiamen
respondents did not disclose their identity.
Prior to presenting the analysis, to help with the understanding of the questionnaire and
simplify the analysis presentation, Table 6.4 is given to refer to the terminology and
abbreviations for the data analysis.

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6.2 Techniques chosen for data analysis

The questionnaire was concerned with investigating respondents attributes on the
relevant factors which are important to port performance and port development. The
respondents were expected to give their choice to the best of their knowledge, based on
a five-point Likert scale.
The data collected from Likert scales are ordinal data (Keller 2005; Pallant 2007),
which are now widely analysed by using parametric techniques (Lewis 2000).
Parametric techniques were employed in this study for a number of reasons:
Firstly, ordinal data from Likert scales are widely treated as interval data, which is not
only supported by famous statisticians such as Keller (2005), Pallant (2007) and Hair et
al. (2010), but also supported by empirical studies, such as Labovitz (1970). Labovitz
(1970) demonstrates that treating ordinal factors as interval has a few advantages which
include: (1) the use of more powerful, sensitive, better developed and interpretable
statistics, (2) more statistical manipulation, such as factor analysis, partial and multiple
correlation and regression, and analysis of variance and covariance.
Secondly, Muthen and Kaplan (1985) note that factor analysis is often conducted on
highly skewed and kurtotic ordinal data, which applies to the current research.
Thirdly, inferences based on parametric analysis of ordinal data are valid if
approximately 68, 95 and 99.7% of the individual values of observed factors fall
respectively within 1, 2 and 3 standard deviations from the mean (Shannon and
Davenport 2001). In this study, approximately 77.8%, 100% and 100% of the Humber
data collected were within 1, 2 and 3 standard deviations from the mean. Approximately
100% of the Xiamen data collected were within 1 standard deviation from the mean.
This indicates that the current data met the criteria and were suitable for parametric
analysis.
Lastly, the current data were identified as reasonably normal. As most parametric factor
tests such as factor analysis are underpinned by the assumption of normal distribution
(Shannon and Davenport 2001), the data collected for this research was therefore
checked for departure from normality prior to the application of parametric tests:
Test of normality
The test of normality was conducted and assessed by SPSS Explore on the whole
sample for all the factors. In the table labelled Tests of Normality, the results of the
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Kolmogorov-Smirnov and Shapiro-Wilk statistic are given. Table 6.5 presents the test
results.
According to Pallant (2007), if the Sig value is more than 0.05, the result indicates
normality. In other words, a non-significant result (Sig value 0.05) implies that the
distribution of the sample is not statistically different from a normal distribution. On the
contrary, a significant result (Sig value 0.05) indicates that the data distribution from
the sample is probably non-normal (Field 2005). The K-S test shows that all the Sig.
values are 0.000, which is less than 0.05, suggesting violation of the assumption of
normality. Then data transformations were tried for each factor to remedy nonnormality. The researcher failed in all the transformations suggested by Field (2005)
and Pallant (2007).
However, whether the data are normal or not does not simply depend on the test of
normality by SPSS. There are a few other perspectives to consider. Firstly, according to
Field (2005), it is not the significance value but the shape of the sampling distribution
that matters. The actual shape of the distribution for each factor was therefore assessed
visually by constructing histograms to detect cases with non-normal distributions. The
data appeared to be reasonably and normally distributed with bell shapes. Secondly,
normality or otherwise of the data was further supported by an inspection of the normal
probability plots (labelled Normal Q-Q probability plots). Thirdly, Field (2005) and
Weinberg & Abramowitz (2008) claim that when the sample is more than 30, the data
tends to be normal or sufficient to compensate for the lack of normality; when the
sample is 200 or more, the sampling distribution is normal regardless of the shape of the
data actually collected. As the sample size in this research was 254, which is larger than
200, the data can be claimed as normal.
Hair et al. (2010) also claim that with a large sample size, the detrimental impacts from
non-normality may be negligible. Fourthly, Field (2005) notes that if the Sig. P<0.001
with a large sample, which is the case with the current research, data normality can be
assumed with skewness and kurtosis values up to 3.29. So, the skewness and kurtosis
were inspected for each factor from the questionnaire. As Table 6.5 shows, all the
values were within this range. This gave evidence and more confidence that the current
research data could be treated as normal, which is the basis for further data analysis.
Where the data were tested and found to be normally distributed, a test for homogeneity
of variance (Levenes test) was conducted, as suggested by Field (2005). The results
revealed no violation of the assumption of homogeneity.
184

Table 6. 5 Test of normality

Kolmogorov-Smirnova

Shapiro-Wilk

Skewness

Kurtosis

Column3
Stats
df

Sig.

Stats

df

Sig.

Skewness

Std. Error of
Skewness

Kurtosis

Std. Error
of Kurtosis

A-shipservices

0.319

254

0.765

254

-0.869

0.153

-0.275

0.304

A-shipgprices

0.263

254

0.807

254

-0.883

0.153

0.121

0.304

A-portcharges

0.207

254

0.866

254

-0.400

0.153

-0.701

0.304

A-feeders

0.242

254

0.849

254

-0.864

0.153

0.386

0.304

A-overallcost

0.209

254

0.854

254

-0.386

0.153

-0.751

0.304

A-handlingspeed

0.252

254

0.860

254

-0.275

0.153

-0.496

0.304

A-risks

0.253

254

0.853

254

-0.36

0.153

-0.445

0.304

A-safety

0.218

254

0.862

254

-0.465

0.153

-0.585

0.304

A-techinfras

0.248

254

0.864

254

-0.341

0.153

-0.559

0.304

A-proximity

0.219

254

0.888

254

-0.248

0.153

-0.597

0.304

A-skills

0.238

254

0.891

254

0.100

0.153

-0.443

0.304

A-landlinks

0.236

254

0.864

254

-0.482

0.153

0.078

0.304

A-logservices

0.253

254

0.858

254

-0.503

0.153

-0.155

0.304

A-governsupt

0.207

254

0.864

254

-0.523

0.153

-0.383

0.304

A-navig.

0.234

254

0.878

254

-0.570

0.153

-0.159

0.304

B-shipservices

0.231

254

0.872

254

0.039

0.153

-0.599

0.304

B-shipngprices

0.260

254

0.867

254

0.201

0.153

-0.515

0.304

B-portcharges

0.219

254

0.895

254

0.029

0.153

-0.57

0.304

B-feeders

0.214

254

0.885

254

-0.034

0.153

-0.586

0.304

B-overallcost

0.284

254

0.849

254

0.309

0.153

-0.214

0.304

B-handlingspeed

0.260

254

0.865

254

-0.176

0.153

-0.454

0.304

B-risks

0.240

254

0.863

254

-0.029

0.153

-0.456

0.304

B-safety

0.290

254

0.833

254

-0.346

0.153

-0.065

0.304

B-techinfras

0.280

254

0.856

254

-0.275

0.153

-0.362

0.304

B-proximity

0.244

254

0.864

254

0.082

0.153

-0.509

0.304

B-skills

0.250

254

0.852

254

-0.026

0.153

-0.344

0.304

B-landlinks

0.240

254

0.886

254

0.066

0.153

-0.313

0.304

B-logservices

0.259

254

0.856

254

-0.180

0.153

-0.444

0.304

B-governsupt

0.196

254

0.908

254

-0.232

0.153

-0.379

0.304

B-navig.

0.225

254

0.889

254

0.019

0.153

-0.494

0.304

C-shipservices

0.272

254

0.753

254

-1.018

0.153

-0.448

0.304

C-shipngprices

0.254

254

0.816

254

-0.865

0.153

-0.452

0.304

C-portcharges

0.232

254

0.833

254

-0.789

0.153

-0.566

0.304

C-feeders

0.253

254

0.769

254

-0.944

0.153

-0.579

0.304

C-overallcost

0.260

254

0.846

254

-0.722

0.153

-0.521

0.304

C-handlingspeed

0.285

254

0.776

254

-1.003

0.153

-0.378

0.304

C-risks

0.259

254

0.814

254

-0.875

0.153

-0.436

0.304

C-safety

0.277

254

0.766

254

-1.071

0.153

-0.184

0.304

C-techinfras

0.278

254

0.760

254

-1.072

0.153

-0.238

0.304

C-proximity

0.229

254

0.846

254

-0.716

0.153

-0.627

0.304

C-skills

0.260

254

0.786

254

-0.986

0.153

-0.319

0.304

C-landlinks

0.255

254

0.784

254

-0.984

0.153

-0.362

0.304

C-logservices

0.288

254

0.760

254

-1.076

0.153

-0.229

0.304

C-governsupt

0.215

254

0.834

254

-0.751

0.153

-0.682

0.304

C-navig.

0.255

254

0.800

254

-0.887

0.153

-0.575

0.304

As demonstrated, since all the four assumptions of parametric tests by Field (2005) and
Pallant (2007) (normally distributed data, homogeneity of variance, interval data and
independence) had been justified, the researcher felt comfortable to employ parametric
techniques for the questionnaire data analysis.
185

Parametric techniques like t-test, analysis of variance (ANOVA) and factor analysis can
be powerfully employed in exploring the nature and the competitive impacts of port
performance enablers. Specifically, based on Field (2005), Keller (2005), Pallant (2007)
and Hair et al. (2010), for the current data, Pearson tests and Spearman tests were
conducted to test the correlation between two factors; Independent-samples t-tests were
used when two groups were compared, which actually compared means; Paired-samples
t-tests were used to compare mean scores with matched pairs for the same group of
people. Being a parametric technique, a one-way ANOVA was supposed to conduct and
detect whether there were significant differences between the groups when the number
of groups was more than two. However, as the numbers of observations in the different
groups were not equal and the ratio of largest number over smallest number was over
1.5, Kruskal-Wallis was employed instead of ANOVA because it was identified more
suitable to test the differences in central tendency between the different groups within
this context of unequal number of observations.
Before the parametric techniques were employed, descriptive statistics were used as
appropriate to conduct some basic analysis. This is acceptable, as 66.7% of articles
published in the Journal of Business Logistics between 1978 and 1993 employed
descriptive statistics (Mentzer and Kahn 1995).
6.3 Descriptive and distribution statistics
Likert scales are often employed in questionnaire surveys and the mean values are often
examined for comparison (Bacon 2003; Matzler et al. 2003; Levenburg and Magal 2005;
Huang et al. 2006; Deng et al. 2008a; Deng et al. 2008b). For this reason, the means in
this research were employed to project factor importance and performance, to indicate
overall group views on how important the factors were to the performance of the
Humber and Xiamen ports, how the two port regions actually performed in terms of
these factors, and how other ports were perceived to perform for the same factors.
A mean score is the prototypical value (arithmetic average) of an observed factor, and it
indicates the group opinion on average. The standard deviation (SD) is a measure of
dispersion and variability around the mean. SD measures how widely the values spread,
representing the amount of disagreement among the respondents. This section reports
the distribution of scores on observed factors around their means, standard deviation,
skewness and kurtosis for all the 45 factors of the questionnaire, which were processed
by SPSS, as presented in Table 6.6 for both combined sample and separate samples.
186

This table shows that both the Humber and Xiamen ports seemed to have positive
ratings of the factors, as the mean scores of all the 45 factors with one exception (the
Humber government support performance: 2.36) were greater than the middle point (3)
on the 1-5 Likert Scale. The SDs were rather high for some factors and low for some
other factors. High SDs revealed significant differences between the responses and the
means and significant differences amongst responses.
For the combined sample, the SDs ranged from 0.7-1.05. For the Humber, the SDs
ranged from 0.7-1.2 of the mean scores. The SDs were over 1 for the importance of
feeders, security, landside links, government support and depth of navigation;
performance of the Humber feeders and depth of navigation availability, performance of
other ports seaside connections, location and depth of navigation. These high SDs
indicate respondents showed big differences from the means for the corresponding
factors. In Xiamen, the SDs ranged from 0.6-0.98 of the mean scores, indicating
Xiamen responses were not so dispersed from their means as the Humber responses.
Measures of distribution, such as skewness and kurtosis, indicate how much the data
vary from normal distribution. Table 6.6 presents that skewness for most factors in the
Humber and Xiamen were negative, indicating that the distribution was stretched on the
left side and negatively skewed.
This means that most factors were highly rated. However, some factors were stretched
on the right side and positively skewed, such as the Humbers B2, B5, B12, B15, C5,
C11 and Xiamens A11, B2, B5, B7, B10, C1, which were over 0.1. These factors were
lowly rated and indicated the distribution had very few large scores and was tailed to the
right.
Kurtosis refers to the peakedness or flatness of the distribution compared with a normal
distribution. The values varied largely for different factors, indicating that there existed
different concentration ratings over the factors. The negative values indicated that the
data were spread out, and the distribution curve was flatter than a normal curve. The
positive values indicated that the data clustered around the mean and the curve was
highly peaked. As most of the kurtosis values were negative, the distribution was flat
for most factors, indicating respondents have different views on the different factors,
which provided indicators for the factor analysis later on.

187

Table 6. 6 Descriptive and distribution statistics

Region

Combined sample
SkewMean
STD
ness

Kurtosis

Mean

The Humber
SkewSTD
ness

Kurtosis

Mean

Xiamen
SkewSTD
ness

Kurtosis

A-shipservices

4.32

0.81

-0.87

A-shipngprices

4.17

0.89

-0.88

-0.27

4.50

0.75

-1.45

0.12

4.48

0.67

-0.92

1.52

4.22

0.83

-0.62

-0.73

-0.29

4.00

0.96

-0.68

-0.28

A-portcharges

3.86

0.96

-0.40

-0.70

4.34

0.70

-0.58

-0.79

3.59

0.98

-0.10

-0.82

A-feeders

3.88

A-overallcost

3.92

1.03

-0.86

0.39

3.67

0.94

-0.39

-0.75

3.82

1.20

-0.68

-0.39

4.00

0.91

-0.84

0.76

0.88

-0.03

-1.00

3.98

0.97

-0.57

-0.55

A-handlspeed
A-risks

3.83

0.83

-0.27

-0.50

3.92

0.82

-0.36

-0.45

4.15

0.74

-0.42

-0.51

3.65

0.82

-0.17

-0.46

4.18

0.84

-0.59

-0.70

3.77

0.78

-0.37

-0.09

A-safety

3.89

0.95

-0.46

A-techinfras

3.83

0.87

-0.34

-0.59

4.14

1.01

-0.94

0.00

3.75

0.88

-0.28

-0.60

-0.56

3.83

0.90

-0.39

-0.54

3.83

0.86

-0.31

-0.55

A-proximity

3.64

0.95

A-skills

3.31

0.92

-0.25

-0.60

3.73

0.97

-0.45

-0.40

3.59

0.94

-0.14

-0.64

0.10

-0.44

3.71

0.92

-0.16

-0.81

3.08

0.83

0.11

-0.05

A-landlinks

3.84

A-logservices

3.91

0.88

-0.48

0.08

3.76

1.00

-0.65

0.27

3.89

0.81

-0.22

-0.62

0.86

-0.50

-0.15

3.91

0.93

-0.65

0.05

3.91

0.82

-0.38

-0.38

A-governsupt

3.88

0.98

-0.52

-0.38

3.51

1.12

-0.17

-0.83

4.09

0.81

-0.44

-0.65

A-navig.

3.74

1.01

-0.57

-0.16

3.64

1.24

-0.56

-0.68

3.80

0.85

-0.29

-0.50

B-shipservices

3.53

0.85

0.04

-0.60

3.66

0.96

-0.10

-0.96

3.46

0.76

0.02

-0.34

B-shipngprices

3.41

0.84

0.20

-0.51

3.49

0.92

0.08

-0.79

3.36

0.79

0.25

-0.30

B-portcharges

3.36

0.94

0.03

-0.57

3.37

0.93

-0.06

-0.57

3.35

0.95

0.08

-0.55

B-feeders

3.47

0.89

-0.03

-0.59

3.42

1.04

-0.03

-0.94

3.50

0.80

0.04

-0.43

B-overallcost

3.21

0.78

0.31

-0.21

3.18

0.80

0.32

-0.24

3.23

0.77

0.31

-0.16

B-handlspeed

3.61

0.82

-0.18

-0.45

3.89

0.82

-0.29

-0.49

3.46

0.78

-0.21

-0.44

B-risks

3.55

0.80

-0.03

-0.46

3.65

0.84

-0.16

-0.52

3.49

0.77

0.02

-0.36

B-safety

3.92

0.74

-0.35

-0.06

3.77

0.87

-0.26

-0.56

4.01

0.65

-0.15

-0.11

B-techinfras

3.62

0.81

-0.28

-0.36

3.48

0.87

-0.09

-0.65

3.70

0.76

-0.35

-0.09

B-proximity

3.54

0.81

0.08

-0.51

3.83

0.81

-0.31

-0.30

3.38

0.77

0.28

-0.23

B-skills

3.52

0.76

-0.03

-0.34

3.61

0.80

0.03

-0.46

3.48

0.74

-0.10

-0.29

B-landlinks

3.25

0.87

0.07

-0.31

3.36

0.87

0.24

-0.55

3.19

0.87

-0.04

-0.24

B-logservices

3.79

0.79

-0.18

-0.44

3.75

0.83

-0.20

-0.51

3.81

0.77

-0.16

-0.41

B-governsupt

3.18

1.04

-0.23

-0.38

2.48

0.92

-0.24

-0.82

3.57

0.88

-0.12

-0.65

B-navig.

3.37

0.90

0.02

-0.49

3.28

1.01

0.12

-0.59

3.43

0.83

0.00

-0.53

C-shipping lines

4.25

0.87

-0.96

0.05

4.03

0.95

-0.61

-0.64

4.39

0.80

-1.20

0.83

C-freight

3.65

0.82

-0.17

-0.46

3.53

0.88

0.04

-0.66

3.73

0.78

-0.28

-0.21

C-port charges

3.66

0.89

-0.20

-0.67

3.68

0.90

-0.18

-0.71

3.65

0.88

-0.22

-0.62

C-seasidelinks

4.17

0.95

-1.04

0.61

3.94

1.11

-0.87

0.09

4.32

0.81

-0.92

-0.06

C-overall cost
C-speed
handling
C-risks

3.45

0.86

0.11

-0.61

3.31

0.89

0.15

-0.69

3.54

0.83

0.12

-0.55

4.02

0.83

-0.72

0.71

3.88

0.97

-0.83

0.63

4.11

0.72

-0.30

-0.62

3.63

0.81

-0.16

-0.42

3.63

0.90

-0.18

-0.68

3.63

0.75

-0.15

-0.24

C-security

4.02

0.72

-0.04

-1.07

4.08

0.75

-0.13

-1.20

3.99

0.70

0.01

-0.96

C-techinfras

4.16

0.76

-0.33

-0.96

4.06

0.81

-0.27

-1.03

4.21

0.72

-0.34

-1.00

C-location

3.67

0.94

-0.09

-0.92

3.54

1.00

0.09

-1.06

3.76

0.89

-0.17

-0.77

C-skills

3.83

0.76

-0.18

-0.37

3.63

0.84

0.26

-0.75

3.96

0.68

-0.41

0.47

C-landside links

4.04

0.82

-0.35

-0.76

3.88

0.84

-0.19

-0.75

4.14

0.79

-0.45

-0.71

C-logservices

4.12

0.75

-0.34

-0.74

4.03

0.77

-0.39

-0.31

4.18

0.74

-0.30

-1.10

C-govsupt

3.82

0.94

-0.36

-0.48

3.18

0.89

0.08

0.07

4.20

0.75

-0.35

-1.13

C-navi & land

4.00

0.92

-0.71

0.11

3.82

1.10

-0.65

-0.42

4.10

0.77

-0.39

-0.62

188

The mean scores were employed to generate Figure 6.7, which gives a more visually
friendly mean comparison between the 45 factors.
HB imp.

HB perf.

HB other ports perf.

XM imp.

XM perf.

XM other ports perf.

5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00

Figure 6. 7 Overview of mean comparison

Table 6.7 presents the means in descending order for combined sample and Table 6.8
presents the mean for the Humber and Xiamen separately. The mean scores vary widely
and will be further employed for data analysis.
Table 6. 7 Mean descending order of 45 factors for combined sample
1-shipservices
2-shippngprices
3-portcharges
4-feeders
5-overallcost
6-handlspeed
7-risks
8-safety
9-techinfras
10-proximity
11-skills
12-landsidelinks
13-logservices
14-govnmtsupt
15-navig.
16-portservices
17-logsupt
18-cost
19-shipgservces
20-others
Grand mean

D.O
A1
A2
A5
A7
A13
A8
A4
A14
A3
A12
A6
A9
A15
A10
A11
A19
A18
A16
A17
A20

Imp.
4.32
4.17
3.92
3.92
3.91
3.89
3.88
3.88
3.86
3.84
3.83
3.83
3.74
3.64
3.31
4.32
3.99
3.87
3.85
3.47
3.86

D.O.
B8
B13
B9
B6
B7
B10
B1
B11
B4
B2
B15
B3
B12
B5
B14
B16
B19
B20
B17
B18

Perf.
3.92
3.79
3.62
3.61
3.55
3.54
3.53
3.52
3.47
3.41
3.37
3.36
3.25
3.21
3.18
3.68
3.53
3.53
3.41
3.33
3.49

D.O.
B8
B13
B6
B9
B10
B11
B7
B1
B4
B2
B3
B15
B5
B12
B14
B16
B20
B19
B17
B18

Perf.B
3.89
3.76
3.59
3.59
3.56
3.55
3.53
3.51
3.48
3.42
3.35
3.27
3.23
3.22
3.11
3.65
3.56
3.51
3.37
3.34
3.47

D.O.
C1
C4
C9
C13
C12
C6
C8
C15
C11
C14
C10
C3
C2
C7
C5
C19
C17
C16
C20
C18

O' Perf.
4.25
4.17
4.16
4.12
4.04
4.02
4.02
4.00
3.83
3.82
3.67
3.66
3.65
3.63
3.45
4.25
4.03
3.96
3.75
3.59
3.90

D.O.
1
2
5
14
12
3
4
15
7
6
9
13
10
8
11
19
18
17
16
20

Imp.-perf.
0.79
0.77
0.71
0.70
0.59
0.50
0.41
0.37
0.37
0.22
0.21
0.13
0.09
-0.03
-0.22
0.64
0.46
0.34
0.44
0.14
0.37

D.O.
12
1
15
14
4
9
6
13
3
11
2
5
8
10
7
19
17
16
18
20

Perf. Dif.
0.82
0.74
0.73
0.70
0.70
0.57
0.44
0.36
0.31
0.28
0.23
0.22
0.13
0.12
0.09
-0.60
-0.47
-0.45
-0.38
-0.25
-0.43

Note: D.O=descending order; Imp=importance, perf=performance, operf=other ports performance

189

Table 6. 8 Mean descending order of 45 factors for both Xiamen and the Humber
Mean descending order

13

12

10

11

15

14

MD

G.M

HB importance

4.50

4.48

4.34

4.18

4.15

4.14

3.91

3.83

3.82

3.76

3.73

3.71

3.67

3.64

3.51

0.99

3.96

Mean descending order

10

13

11

12

15

14

HB performance

3.89

3.83

3.77

3.75

3.66

3.65

3.61

3.49

3.48

3.42

3.37

3.36

3.28

3.18

2.48

1.41

3.48

Mean descending order

13

12

15

11

10

14

HB o performance

4.08

4.06

4.03

4.03

3.94

3.88

3.88

3.82

3.68

3.63

3.63

3.54

3.53

3.31

3.18

0.90

3.74

Mean descending order

14

13

12

15

10

11

XM importance

4.22

4.09

4.00

4.00

3.98

3.91

3.89

3.83

3.80

3.77

3.75

3.65

3.59

3.59

3.08

1.14

3.81

Mean descending order

13

14

11

15

10

12

XM performance

4.01

3.81

3.70

3.57

3.50

3.49

3.48

3.46

3.46

3.43

3.38

3.36

3.35

3.23

3.19

0.81

3.49

Mean descending order

14

13

12

15

11

10

XM o performance

4.39

4.32

4.21

4.20

4.18

4.14

4.11

4.10

3.99

3.96

3.76

3.73

3.65

3.63

3.54

0.85

3.99

Mean descending order

14

12

15

13

11

10

HB (imp-perf)

1.03

0.99

0.97

0.84

0.63

0.53

0.40

0.37

0.36

0.35

0.26

0.25

0.16

0.10

-0.10

Mean descending order

12

14

15

10

13

11

XM (imp-perf)

0.76

0.75

0.70

0.64

0.51

0.50

0.38

0.27

0.24

0.20

0.20

0.13

0.10

-0.25

-0.40

Mean descending order

14

15

12

13

11

10

HB perf. Dif (C-B)

0.82

0.72

0.67

0.62

0.55

0.41

0.37

0.37

0.35

0.14

0.05

0.04

0.04

0.00

-0.28

Mean descending order

12

15

14

11

10

13

XM perf. Dif (C-B)

0.95

0.94

0.79

0.73

0.67

0.63

0.51

0.45

0.36

0.36

0.34

0.28

0.27

0.13

-0.02

Mean descending order

10

11

12

14

15

13

dif (C-B) XM-HB

0.64

0.62

0.53

0.45

0.39

0.33

0.31

0.24

0.19

0.16

0.12

0.09

0.06

0.02

0.01

Mean descending order

11

14

15

10

12

13

(HB-XM) imp. dif

0.74

0.63

0.58

0.50

0.48

0.42

0.39

0.33

0.28

0.17

0.16

0.14

0.13

0.00

0.00

Mean descending order

14

10

12

15

11

13

(HB-XM) perf. dif

1.10

0.44

0.43

0.23

0.22

0.21

0.17

0.16

0.14

0.13

0.13

0.08

0.06

0.04

0.02

Mean descending order

14

11

15

12

10

13

(HB-XM) o'perf.dif.

1.02

0.38

0.36

0.33

0.28

0.26

0.23

0.22

0.22

0.20

0.15

0.15

0.08

0.03

0.00

1.13

1.15

1.10

0.96

0.63

0.75

1.08

1.03

6.4 Factor analysis

Before researchers carry out IPA, they often conduct Factor Analysis to reduce the
number of factors; Lai and To (2010) provide an example. The same approach was
employed in the current data analysis.
The different questionnaire factors in Section A were found to be highly correlated. The
factors could be grouped and reduced to a smaller number by employing Factor
Analysis. According to Hair et al., a factor (referred to as aggregate factor in this
thesis) is a set of factors that are highly interrelated and factor analysis is defined as an
interdependency technique whose primary purpose is to define the underlying structure
among the factors in the analysis (Hair et al. 2010).
6.4.1 Justification of factor analysis
Prior to conducting factor analysis, the suitability of data for factor analysis was
assessed. Firstly, the ratio of observations to the factors should be 10:1 (Field 2005;
Pallant 2007), at least a desired ratio of 5 observations per factor, and the minimum
absolute sample size should be over 50 observations (Hair et al., 2010). The current
190

research met the requirement, with 254 valid responses to analyse 15 factors. Secondly,
Table 6.9 revealed the data matrix which shows that the factors in Section A were
sufficiently correlated.
Table 6. 9 Correlations of factors in Section A
V

correlati

A1

on
Pearson

A2

Correlati
Sig. (2on
tailed)
Pearson

.130*

A3

Correlati
Sig. (2on
tailed)
Pearson

.168**
0.01

A4

Correlati
Sig. (2on
tailed)
Pearson

.214**

0.09

0.17

0.15

A5

Correlati
Sig. (2on
tailed)
Pearson

0.08

.288**

.198**

Correlati
Sig. (2on
tailed)
Pearson

0.18

A6

.226**

.279**

.495**

.167**

0.01

A7

Correlati
Sig. (2on
tailed)
Pearson

.128*

.218**

.352**

.137*

.165**

0.04

0.03

0.01

A8

Correlati
Sig. (2on
tailed)
Pearson

.199**

.162**

.272**

.214**

.177**

.382**

.456**

0.01

A9

Correlati
Sig. (2on
tailed)
Pearson

A10

Correlati
Sig. (2on
tailed)
Pearson
Correlati
Sig. (2on
tailed)
Pearson

0.32

0.19

0.08

0.4

0.04

0.01

0.01

0.01

A11

.240**

.239**

.323**

.264**

.134*

.360**

.312**

.472**

.409**

0.03

A12

Correlati
Sig. (2on
tailed)
Pearson

0.09

0.1

.339**

0.11

.224**

.210**

.226**

.400**

.214**

0.14

0.11

0.08

A13

Correlati
Sig. (2on
tailed)
Pearson

.209**

.173**

.163**

.241**

0.1

.257**

.179**

.309**

.369**

0.11

.444**

Correlati
Sig. (2on
tailed)
Pearson

0.01

0.01

0.12

0.09

A14

0.03

0.04

0.07

.268**

.174**

0.12

0.12

.196**

.295**

.140*

.126*

.243**

0.59

0.5

0.29

0.01

0.05

0.06

0.03

0.04

A15

Correlati
Sig. (2on
tailed)
Pearson

.182**

.124*

0.11

.240**

0.08

.172**

.199**

.254**

.373**

.192**

.274**

.377**

.207**

.362**

0.05

0.08

0.21

0.01

Correlati
Sig. (2on
tailed)

A1

A2
.130

A3
*

.168

A4

**

.214

**

A5

A6

0.08

.226

**

A7
.128

A8
*

.199

A9

A10

**

0.12

0.06

A11
.240

**

A12
0.09

A13
.209

**

A14

A15

0.03

.182**

0.04

0.01

0.18

0.04

0.05

0.32

0.14

0.59

.558**

0.09

.288**

.279**

.218**

.162**

.160*

0.08

.239**

.173**

0.04

.124*

0.17

0.01

0.01

0.19

0.01

0.5

0.05

0.09

.198**

.495**

.352**

.272**

.331**

0.11

.323**

0.1

.163**

0.07

0.11

0.04
.558**

0.09

.331

**

0.15

0.08

0.11

0.01

0.29

0.08

.185**

.167**

.137*

.214**

.280**

0.05

.264**

.339**

.241**

.268**

.240**

.185**

.280

**

0.01

0.03

0.4

.278**

.165**

.177**

.157*

.127*

.134*

0.11

0.1

.174**

0.08

.278**

.157

0.01

0.01

0.04

0.03

0.08

0.12

0.01

0.21

.474**

.382**

.371**

.165**

.360**

.224**

.257**

0.12

.172**

.474**

.371

**

0.01

0.05

0.01

.456**

.360**

.159*

.312**

.210**

.179**

0.12

.199**

.360

**

0.01

0.06

.519**

.168**

.472**

.226**

.309**

.196**

.254**

0.01

.519

**

0.12

.160

0.05

0.01

0.01

0.06

0.08

0.11

0.05

.127*

.165**

.159*

.168**

.253

.253**

**

.409

**

.400

**

.369

**

.295

**

.373**

.337**

.214**

0.11

.140*

.192**

.337**

0.09

0.03

.402**

.444**

.126*

.274**

.402**

0.04

.495**

.243**

.377**

.495**

.330**

.207**

.330**

.362**
0
1

*Correlation is significant at 0.05 level (2-tailed). For each factor, line 1 refers to Pearson correlation.
** Correlation is significant at 0.01 level (2-tailed). For each factor, line 2 refers to Sig. (2-tailed).
Table 6. 10 KMO and Bartletts Test for importance factors
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Approx. Chi-Square
Df
Bartlett's Test of Sphericity
Sig.

0.789
969.27
105
0.000

Thirdly, the Kaiser-Meyer-Oklin (KMO) value can measure the appropriateness of

factor analysis. The Bartlett test of sphericity is a statistical test for the presence of
correlations. The KMO value extracted from SPSS (Table 6.10) was 0.789, exceeding
the recommended value of 0.6 (Hair et al. 2010). A statistically significant Barletts test
of Sphericity (Sig. < 0.05) indicates that sufficient correlation exists among the factors
to proceed. The value reached statistical significance (the Sig. value was 0.000, which
191

was less than 0.05). The KMO and Bartletts Test results together with the sample size
of 254 support the factorability of the correlation matrix.
Fourthly, the data should be normally distributed, which has already been discussed in
Section 6.4. Lastly, factor analysis has been employed recently as an appropriate
methodology to validate measurements in port and transport studies (Yeo et al. 2008;
Tracey 2004). Thus it is suitable to conduct factor analysis with the current data.
6.4.2 Choice of factor analytic techniques
Factor analysis is a data reduction technique with a family of factor analytic techniques.
Principal components analysis (PCA) and factor analysis (FA) are known as the two
main distinctive techniques. In PCA, the original factors are transformed into a smaller
set of groups, with all the variance in the factors being used; while in FA, only shared
variance is analysed (Pallant 2007). Hair et al. (2010) claim PCA is the most
appropriate when data reduction is paramount, while FA is most suitable for wellspecified theoretical applications.
PCA is often used to identify key determining factors as only a data reduction method
(Pallant 2007; Hair et al. 2010). As the current research involved data reduction and
there was no well-specified theoretical application, PCA was employed.
6.4.3 Extraction method
Factor extraction determines the smallest number of factors that best represent the
interrelations among the factors (Pallant 2007). There are several methods for
unearthing factors in the data collected. SPSS provides seven extraction techniques,
namely, principal component, principal factors, image factoring, maximum likelihood
factoring, alpha factoring, un-weighted least squares and generalised least squares. The
method to choose depends on the purpose of the analysis. As this research aimed to
explore the data, principal component and principal factors were preferred; as the two
methods result in similar results (Field 2005), and as principal component is the most
popular technique and set as the default technique in the SPSS system, PCA was used as
the factor extraction method in the current research.
6.4.4 Choice of rotation method
Factor rotation is an important step to improve the factor patterns and help to interpret
the result of factor analysis (Hair et al. 2010). There are two main approaches to rotation:
orthogonal and oblique factor solutions. SPSS provides a few rotational techniques
192

within the two broad approaches. Varimax is the most commonly used orthogonal
technique while Direct Oblimin is the most commonly used oblique technique, allowing
for factors being related rather than remaining independent. The former attempts to
minimize the number of factors with high loadings on each factor and results in
solutions which are more interpretable (Field 2005; Pallant 2007). It helps to obtain a
simpler and more meaningful structure (Hair et al. 2010). The latter is often
recommended to provide information about the degree of correlation between the
different factors. The current research employed PCA with Varimax rotation, as it
aimed to provide a clear and meaningful factor categorization. The Varimax rotation
was supposed to help with the independent common key factors that influence the
development of the ports factor performance. In order to find out the common factors
influencing port performance, the combined valid data from both the Humber and
Xiamen were used for the factor analysis, as the common factors would provide a
comparable base for later comparative analysis.
6.4.5 Decision on the number of factors
Factor analysis aims to extract only a small number of the factors which can adequately
represent the whole set of factors (Hair et al. 2010). The decision on the number of
factors to extract is critical, as too many factors may cause difficulty in result
interpretation while too few factors may conceal the important dimensions or correct
structure and too few factors can cause serious problems. During the analysis, multiple
criteria of eigenvalues, percentage of variance criteria, Scree Test criteria,
interpretability, and internal consistency were combined and used to determine the
appropriate number of factors, as suggested by Pallant (2007) and Hair et al. (2010).
Firstly, eigenvalue was employed as the criterion of eigenvalue has the advantage of
simplicity and objectivity. According to Hair et al. (2010), if the number of factors is
20-50, factors with eigenvalues greater than 1 should be retained as they are regarded as
significant; if the number of factors is less than 20, which applies to the current research,
eigenvalues greater than 1 would result in too few factors. The researcher tried
eigenvalues greater than 0.9 to get a more suitable number of factors.
Secondly, percentage of variance was considered. Hair et al. (2010) claim that enough
factors should be considered to meet a specified percentage of variance explained,
usually 60% or higher. In this research, the percentage of 60% was chosen, as Hair et al.
(2010) claim that 60% of variance is regarded as satisfactory in social science due to the
193

less precise information. This criterion was jointly considered with the criterion of
eigenvalue. Table 6.11 presents the total variance explained from SPSS.
Table 6. 11 Total Variance Explained
Extraction Sums of
Squared Loadings

Initial Eigenvalues

Rotation Sums of Squared Loadings

Component
1

Total
4.375

%
of
Variance
29.165

Cumulative %
29.165

Total
4.375

%
of
Variance
29.165

Cumulative %
29.165

Total
2.486

%
of
Variance
16.575

Cumulative %
16.575

1.695

11.298

40.462

1.695

11.298

40.462

2.234

14.894

31.469

1.108

7.389

47.851

1.108

7.389

47.851

1.718

11.452

42.921

1.041

6.939

54.79

1.041

6.939

54.79

1.419

9.463

52.384

0.945

6.297

61.087

0.945

6.297

61.087

1.305

8.702

61.087

0.894

5.96

67.047

0.852

5.677

72.724

0.725

4.832

77.556

0.678

4.519

82.076

10

0.626

4.171

86.246

11

0.556

3.708

89.954

12

0.478

3.19

93.144

13

0.39

2.603

95.747

14

0.349

2.325

98.072

15

0.289

1.928

100

Extraction Method: Principal Component Analysis. The rotation method was Varimax with Kaiser Normalization.

Thirdly, the interpretability of the factors was employed as it explains whether a group
of items loaded on a given factor makes sense. Fourthly, the Scree Test Criterion was
employed. Figure 6.8 presents the Scree Plot drawn from SPSS. The graph was
examined and reference made to the cut-off point to identify the number of factors to
retain. The last substantial drop was considered as the appropriate number of factors.
This is a subjective rule to decide the cut-off point. The figure shows that 7 is the
maximum point before the graph straightens out.

Figure 6. 8 Scree Plot

Lastly, the internal consistency was considered to determine the number of factors to
retain. The Cronbachs Alpha statistic was used to determine whether the factors under
194

the corresponding A-factors were internally consistent and reliable. The reliability of the
factor analysis was tested and the results of the reliability statistics revealed that the
Cronbachs Alpha values were 0.749, 0.687 and 0.613 for the first three factors (Table
6.12). No reliability test was conducted for the last two factors as it is recommended
that only variables constructed from three or more propositions be tested for reliability
(Peter 1979). According to Hair et al. (2010), if the Cronbachs values range from 0.5 to
0.7, it indicates the factors under the factor have normal consistency and they are
sufficiently reliable; if the Cronbachs values exceed 0.7, there is high consistency
between the factors. As the Cronbachs Alpha values were all between 0.5 and 0.8,
these computed factors indicate normal internal consistency.
Table 6. 12 Rotated Component Matrix with loadings on each factor (combined samples)
Factors
A-risks
A-safety
A-handling speed
A-port infrastructure
A-government support
A-feeders
A-navi & land
A-landside links
A-logistics services
A-shipping prices
A-overall cost
A-port charges
A-shipping services
A-proximity
A-skills

Port services
.787
.740
.636
.605

Log. Support

Factors
Cost

Shipping services

Others

.772
.591
.582
.574
.468
.788
.675
.627
.789
.886
.495

% of variance
29.17%
11.30%
Cumulative percentage
29.17%
4.046%
Cronbachs Alpha
0.749
0.687
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 9 iterations.

7.39%
47.85%
0.613

6.94%
54.79%
X

6.30%
61.09%
X

Based on the above five criteria, five factors were extracted with eigenvalues exceeding
0.9. Orthogonal (Varimax) rotation of the factors yielded the factor structure given in
Table 6.12. The final results of PCA revealed the presence of five components,
explaining 29.165%, 11.298%, 7.389%, 6.939% and 6.297% of the variance
respectively. The 5-component solution explained a total of 61.087% of the variance.
The Rotated Component Matrix presents five components. The five aggregate factors
were named based on the nature of the constituent factors. The first A-factor port
services is made of four factors, namely, speed of handling, safety, risks and port
infrastructures with the corresponding factor loadings 0.787, 0.740, 0.636 and 0.605.
The second A-factor logistics support consists of five factors: feeders, landside links,
195

services of logistics, government support and navigation whose factor loadings are
0.591, 0.574, 0.468, 0.772 and 0.582 respectively. The third A-factor cost
incorporates three factors: freight, port charges and overall logistics cost, whose factor
loadings are 0.788, 0.627 and 0.675 respectively. The fourth A-factor shipping services
contains only one factor (shipping services) with a factor loading of 0.789. The last Afactor others contains two factors of proximity and skills whose corresponding factor
loadings are 0.886 and 0.495. This structure was used for further analysis. The factor
with cross-loading was not deleted because the objective of the factor analysis is strictly
data reduction (Hair et al. 2010).
6.4.6 The significance of factor loadings
The rotated solution revealed the presence of a simple structure, with the components
showing a number of strong loadings. Factor loading actually is the correlation between
a measured variable and its factor. The loadings are referred to in order to decide which
factors should be incorporated into which aggregate factors (Field 2005). According to
Hair et al. (2010), the higher the loadings, the more important the factors are in
interpreting the result. They note that factor loadings from 0.3-0.4 are minimally
accepted, factor loadings of 0.5 are practically significant and factor loadings of >0.7
indicate a well-defined structure.
The results of factor analysis are presented in Table 6.12, which presents a clear rotated
component structure of five components based on overall samples. According to Field
(2005) and Hair (2010), if the sample size is more than 250 (in the current study, the
size was 254), the factor loading should be over 0.35 (Field suggested 0.364, Hair
suggested 0.35), to be acceptable for interpretation of structure. Stevens (1992) also
recommends that it is practical to interpret the factors whose loadings are greater than
0.4. As Table 6.12 shows, all the factor loadings are more than 0.49. This indicates that
the extracted factors are very reliable.
The factor loadings in Table 6.12 show that the availability of shipping services,
shipping prices, risks and logistics services were considered critical for their aggregate
factors. The results indicate that key factors for port importance are service related,
implying that the ports rely on efficient services.
6.4.7 Results of factor analysis
Supported by the Cronbachs alpha, the factors within the A-factors are highly related,
and the correlations between the factors are significant; hence it is necessary to create
196

summated scales for each factor. The five summated factors were computed into SPSS
as A16-port services, A17-logistics support, A18-cost, A19-shipping services and A20others respectively for further analysis. The means of the five A-factors were simply
output by averaging the scores of factors. The means were 3.87, 3.85, 3.99, 4.32 and
3.47 respectively, which indicated the factor importance hierarchy order was shipping
services, cost, port services, logistics support and others. Correspondingly, B16-port
services, B17-logistic support, B18-cost and B19-shipping services and B20-others
were input into SPSS for Section B analysis; and C16-port services, C17-logistic
support, C18-cost and C19-shipping services and C20-others were input into SPSS for
Section C analysis. The structure of factors is shown in Figure 6.9.
Shipping services 4.32
Shipping services
4.32
Shipping prices 4.17
Overall log. cost 3.92
Port charges 3.86

Cost
3.99
Factors for
port importance

Risks 3.92
Safety 3.89
Handling speed 3.83
Port infrastructure 3.83

Port services
3.87

Logistics support
3.85

Others
3.47

Services of log. 3.91

Feeders 3.88
Gov. support 3.88
Landside links 3.84
Navigation& land 3.74

Proximity 3.64
Skills 3.31

Figure 6. 9 Structure for factors influencing port performance

6.4.8 Factor validity

Before factor analysis but after confirming statistically that the questionnaire data were
devoid of random effects, a test of reliability was conducted as a measure of the internal
consistency of instruments to find out whether the data collected were reliable or not, as
instructed by Pallant (2007). The Cronbachs coefficient alpha, which provides an
indication of the average correlation among all of the items making up the scale, was
employed to test the internal consistency of the combined data from both the Humber
and Xiamen, and for the Humber and Xiamen responses separately. According to
Pallant (2007), the scale has very good internal consistency if the Cronbachs Alpha
197

coefficient is above 0.8. Nunnaly (1978) believes that coefficients greater than 0.7
indicate high credibility. In this research, as presented in Table 6.13, the Cronbachs
alpha coefficient was 0.917 for the Humber, 0.941 for Xiamen, and 0.932 for combined
data from both the Humber and Xiamen, suggesting a very good internal consistency
and the scale was considered very reliable with the sample.
After the factor analysis, the convergent validity, which refers to the unit dimensionality,
was confirmed by the test of reliability for the A-factors. The outcome was presented in
Table 6.12. Then the discriminant validity was tested by the correlations between the
five A-factors. Table 6.14 presents the correlations and interrelationships among these
factors. All the correlations are significant at the 0.01 level, which means the factors are
different and independent. This implies that the discriminant validity of the
questionnaire is high. The results of correlations confirm the appropriateness of the
decision to use Varimax as the rotation method.
Table 6. 13 Reliability Statistics
Region

Cronbach's Alpha

Cronbach's Alpha Based on Standardized Items

# of Items

Humber

0.917

0.895

45

Xiamen

0.941

0.919

45

Overall

0.932

0.910

45

Table 6. 14 Correlations between aggregate factors

A16-port servc
Pearson Correlation 1
Sig. (2-tailed)
A17-logsupt
Pearson Correlation .465**
Sig. (2-tailed)
0
A18-cost
Pearson Correlation .445**
Sig. (2-tailed)
0
A19-shipservc
Pearson Correlation .224**
Sig. (2-tailed)
0
A20-others
Pearson Correlation .464**
Sig. (2-tailed)
0
**. Correlation is significant at the 0.01 level (2-tailed).
A16-port servc

A17-logsupt
.465**
0
1
.214**
0.001
.220**
0
.396**
0

A18-cost
.445**
0
.214**
0.001
1
.170**
0.007
.274**
0

A19-shipservc
.224**
0
.220**
0
.170**
0.007
1
.183**
0.003

A20-others
.464**
0
.396**
0
.274**
0
.183**
0.003
1

Table 6.15 presents the A-factor means by different sections and by mean hierarchy.
Based on Table 6.15 and Figure 6.9, obviously, the importance of the factors was in
descending order as shipping services, shipping prices, overall cost, risks, logistics
services, safety, feeders, government support and port charges. The other six factors
were considered unimportant, as their means were below the combined grand mean.

198

Table 6. 15 Factor comparison by mean in descending order (D.O.= descending order)

A16-port servc
A17-logsupt
A18-cost
A19-shipservc
A20-others
B16-portservc
B17-logsupt
B18-cost
B19-shipservc
B20-others
C16-portservc
C17-support
C18-cost
C19-shipping
line
C20-others

Comb.
b
3.87
3.85
3.99
4.32
3.47
3.68
3.41
3.33
3.53
3.53
3.96
4.03
3.59
4.25
3.75

HB
4.08
3.70
4.21
4.50
3.72
3.70
3.26
3.35
3.66
3.72
3.91
3.77
3.50
4.03
3.58

XM
n
3.75
3.94
3.86
4.22
3.33
3.66
3.50
3.31
3.46
3.43
3.98
4.19
3.64
4.39
3.86

Comb. D.O.
A19-shipservc
A18-cost
A16-port servc
A17-logsupt
A20-others
B16-portservc
B19-shipservc
B20-others
B17-logsupt
B18-cost
C19-shipping
line
C17-support
C16-portservc
C20-others
C18-cost

Mean
4.32
3.99
3.87
3.85
3.47
3.68
3.53
3.53
3.41
3.33
4.25
4.03
3.96
3.75
3.59

HB factor D.O
A19-shipservc
A18-cost
A16-port servc
A20-others
A17-logsupt
B20-others
B16-portservc
B19-shipservc
B18-cost
B17-logsupt
C19-shipping
line
C16-portservc
C17-support
C20-others
C18-cost

Mean
4.50
4.21
4.08
3.72
3.70
3.72
3.70
3.66
3.35
3.26
4.03
3.91
3.77
3.58
3.50

XM factor D.O.
A19-shipservc
A17-logsupt
A18-cost
A16-port servc
A20-others
B16-portservc
B17-logsupt
B19-shipservc
B20-others
B18-cost
C19-shipping
line
C17-support
C16-portservc
C20-others
C18-cost

Mean
4.22
3.94
3.86
3.75
3.33
3.66
3.50
3.46
3.43
3.31
4.39
4.19
3.98
3.86
3.64

6.5 Comparative analysis

Since this chapter sought to examine the questionnaire factors and the samples are from
two different port regions, it is useful to analyse data from both the combined sample
and separate samples. To analyse combined sample enables this research to obtain
common factors and their differences in importance and performance among these
factors. To analyse separate samples enables this research to get separate results, whose
comparison may result in different strategies for the different samples. Factor analysis
has a disadvantage that by analysing factors, some of the richness in the data may be
lost (Field 2005). Moreover, the factors in different port regions may vary (Ford et al.
1999). For these reasons, both combined and separate analyses were conducted, and the
main analysis referred to the 15 questionnaire factors rather than the aggregate factors,
also to avoid losing rich data and confusion. The comparative analysis is based on the
15 factors, which are reasonably controllable for comparison and presentation.
Besides the combined sample analysis, an Independent-Samples T-test was employed to
test the difference between two different samples of people for the two sets of scores, as
suggested by Howitt and Cramer (2003), Field (2005) and Pallant (2007). In this case, it
was used to compare importance/performance difference and other ports performance
difference on the 15 factors between the Humber and Xiamen.
The output Independent Samples Test presents the results of Levenes test for equality
of variances in its Sig. column. According to Pallant (2007), when the Sig. value is
larger than 0.05, the first line in the table should be used, which refers to Equal
variances assumed. When the Sig. value is equal to or less than 0.05, it means the
variances for the two groups are not the same and the data violate the assumption of
equal variance. Then the information in the second line of the t-test table was used,
which refers to Equal variances not assumed. Sig. (2-tailed) values were then checked to
199

assess the differences between the groups. If the value in the Sig (2-tailed) column is
above 0.05, there is no significant difference between the two groups; otherwise there is
significant difference between the two groups (Pallant 2007).
6.5.1 Importance comparison
Factor importance for combined sample, plus comparison between HB and XM
Factor importance was analysed by mean scores. Tables 6.6, 6.7, 6.8 and 6.15 were
referred to reflect the different means and importance hierarchy.
In terms of A-factor importance, for combined samples, Table 6.15 shows that A19 shipping services was the most important A-factor. This was followed by cost, port
services, logistics support and others. As for separate samples, Table 6.15 shows that
A19 - shipping services was the most important for both the Humber and Xiamen. Both
regions considered that cost was more important than port services, which were more
important than others. However, the Humber considered logistics support is the least
important while Xiamen considered it the second most important. Following shipping
services, the Humber considered cost, port services, others and logistics support as
important in descending order, while Xiamen considered logistics support, cost, port
services and others as important in descending order.
In terms of the questionnaire factor importance, Tables 6.7 and 6.8 present that the 15
factors were categorised into two groups: important factors and unimportant factors,
which were distinguished by grand means. Table 6.7 presents factor importance in
descending order for the combined sample: shipping services, shipping prices, overall
logistics cost, risks, logistics services, safety, feeder services and government support.
Table 6.8 presents factor importance in descending order for separate samples. Both the
Humber and Xiamen considered shipping services the most important. Following that,
the Humber considered the importance of shipping prices, port charges, risks, handling
speed and safety in descending order, while Xiamen considered the importance of
government support, shipping prices, feeders, overall cost, logistics services, landside
links and port technical infrastructure important in descending order.
For the top five factors of importance, both port regions considered shipping services,
shipping prices and overall logistics cost very important, and these three factors are all
service quality-related. This finding is not consistent with Song and Yeo (2004) who
find that traditional factors such as location and port facilities rather than service quality
are important in China. Besides the common important factors, the Humber and Xiamen
200

have some difference in the top five factors. The Humber considered two additional
factors (safety and handling speed) important, while Xiamen considered another two
factors (government support and feeders) important. Relatively, both the Humber and
Xiamen considered proximity and skills not so important. Moreover, the Humber
considered government support, navigation and feeders not so important while Xiamen
considered port charges, cargo handling speed and port safety not so important
compared with other factors.
Based on the mean values, Figure 6.10 illustrates the factors importance comparison,
which gives a visual overview of the comparison both across regions and within regions.
Combined imp

Humber imp

Xiamen imp

5.0
4.0
3.0
2.0
1.0
0.0

Figure 6. 10 Importance comparisons between HB, XM and combined sample

Table 6.16 gives an overview of the importance comparison between the Humber and
Xiamen and within the region themselves, with both A-factors and questionnaire factors.
Table 6. 16 Overview of factor importance comparison
Q-Factor

HB
A-Factor
imp. In D.O.
A19-shipservc

Imp.
A1

Unimp.

XM A-Factor
imp. In D.O.
A19-shipservc

A18-cost

A2, A3

A5

A11, A10

A16-portservc
A20-others

A17-logsupt

A7,
A6,
A8, A9

A13

A14,
A15, A4,
A12

Q-Factor
Unimp.

A17-logsupt

Imp
A1
A14, A4, A13,
A12

Factor
dif.
(HBvsXM)
A20-extservc

A15

A18-cost

A18-cost
A16-portservc

A2, A5
A9

A3
A6,
A7

A20-others

A8,

A11, A10

Q-Factor
Sig.
Dif.
A11

A16-portservc
A19-shipserv

A3,
A2
A6,
A7,
A8
A1

A17-logsupt

A14,
A4

Insig. dif
A10
A5

A9
A12,
A13,
A15

The table reveals that although some A-factors were considered very important, not all
the corresponding questionnaire factors were important. Similarly, although some Afactors were identified as not so important, not all the corresponding questionnaire
factors were identified as unimportant. This also gives evidence to support why
questionnaire factors were preferred for analysis instead of aggregate factors for

201

detailed comparison. This table presents which factors and A-factors were identified as
important/unimportant as well. It presents the factor difference in descending order.
Significant and insignificant differences between the Humber and Xiamen
An Independent-Samples T-test was conducted to test statistically the factor importance
difference between the Humber and Xiamen. The test results in Table 6.17 reveal
significant differences between the Humber and Xiamen over 9 factors, whose mean
difference was in descending order: port charges, skills, government support, speed of
cargo handling, shipping prices, risk, safety, feeders and shipping services availability.
The test results revealed no significant differences over the remaining 6 factors. The
mean difference column shows the extent of the difference. The test results clearly
demonstrate that for the factors with significant differences, the scores given by the
Humber respondents were significantly higher than those by Xiamen respondents,
except for government support and feeders.
Table 6. 17 Factors with significant/insignificant difference between HB and XM importance
Item
A3-portcharges
A11-skills
A14-govs.upt
A6-handlspeed
A2-shipprices
A7-risks
A8-safety
A4-feeders
A1-shipservices
A5-overall cost
A15- navig.
A10-proximity
A12-landlinks
A13-logservices
A9-techinfrs

The Humber
Mean
SD
4.34
0.70
3.71
0.92
3.51
1.12
4.15
0.74
4.48
0.67
4.18
0.84
4.14
1.01
3.67
1.20
4.50
0.75
3.82
0.88
3.64
1.24
3.73
0.97
3.76
1.00
3.91
0.93
3.83
0.90

Xiamen
Mean
SD
3.59
0.98
3.08
0.83
4.09
0.81
3.65
0.82
4.00
0.96
3.77
0.78
3.75
0.88
4.00
0.91
4.22
0.83
3.98
0.98
3.80
0.85
3.59
0.94
3.89
0.81
3.91
0.82
3.83
0.86

T value
7.012
5.390
-4.310
4.948
4.231
4.020
3.203
-2.267
2.709
-1.354
-1.111
1.144
-1.049
-0.005
-0.009

P (Sig. 2-tailed)
0.000
0.000
0.000
0.000
0.000
0.000
0.002
0.025
0.007
0.177
0.269
0.254
0.296
0.996
0.992

Mean dif.
0.74
0.63
-0.58
0.50
0.48
0.42
0.39
-0.33
0.28
-0.17
-0.16
0.14
-0.13
0.00
0.00

95% CI
Lower
0.535
0.397
-0.839
0.294
0.256
0.214
0.149
-0.61
0.078
-0.408
-0.448
-0.102
-0.369
-0.223
-0.226

Upper
0.953
0.856
-0.312
0.702
0.701
0.625
0.627
-0.042
0.49
0.075
0.126
0.386
0.113
0.222
0.224

ETA
squared
0.171
0.143
0.113
0.084
0.066
0.060
0.039
0.033
0.028
0.007
0.009
0.005
0.007
0.000
0.000

This section has addressed Research Objective One, which was to identify the important
factors that drive a ports performance. It has also investigated the importance
differences among these factors, which is part of Research Objective Two. Lastly, it has
analysed how the factor importance varies for different ports by t-test, which is part of
Research Objective Three.
6.5.2 Performance comparison
Factor performance for combined sample, plus comparison between HB and XM
Tables 6.6, 6.7, 6.8 and Figure 6.11 present the actual performance of the Humber and
Xiamen ports and their combined data. In terms of the questionnaire factor performance,
the 15 factors were categorised into two groups: good performance and poor
202

performance, which were distinguished by the grand means. Table 6.7 presents factor
performance in descending order for the combined sample: port safety, logistics services,
port technical infrastructure, speed of cargo handling, risks, proximity, shipping
services and skills. Table 6.8 presents factor performance in descending order for
separate samples. The Humber performed well in the following factors in descending
order: speed of cargo handling, proximity, safety, logistics services, shipping services,
risks and skills, whereas Xiamen performed well in the following factors in descending
order: port safety, logistics services, port technique infrastructure, government support,
feeder services and risks. The remaining factors were identified as being poorly
performed.
For the top five factors of performance, both the Humber and Xiamen had very good
performance in logistics services, risks and safety. Besides these, the Humber
performed well in handling speed, proximity and shipping services, while Xiamen
performed well in port infrastructure, government support and feeders.
Relatively, both the Humber and Xiamen performed poorly in overall logistics cost,
navigation, port charges and landside links, although they considered cost was a very
important factor. This finding emerged from interviews and was validated by this
questionnaire finding. This finding indicates that both regions need to improve the
performance of port charges, overall cost reduction and landside links. Moreover, the
Humber performed poorly in government support and feeder services, while Xiamen
performed poorly in shipping prices and proximity. The Humber needs to improve these
factors accordingly.
Combined perf.

Humber perf.

Xiamen perf.

5.0
4.0
3.0
2.0
1.0
0.0

Figure 6. 11 Performance comparisons between HB, XM and combined sample

These two port regions had some differences in performance. The Humber rated itself
good in feeder connections while Xiamen scored well on port technical infrastructure.
203

The Humber scored very poorly on government support, location and navigation while
Xiamen did not.
Based on the mean values, Figure 6.11 illustrates the factors performance comparison,
which gives a visual overview of the comparison both across regions and within regions,
for both combined and separate samples.
Significant and insignificant performance differences between HB and XM
An Independent Samples t-test was conducted to test the performance difference in the
15 factors between the Humber and Xiamen. The test results are presented in Table 6.18
which reveals significant differences between the Humber and Xiamen in five factors.
Table 6. 18 Factors with significant /insignificant difference between HB and XM performance
Item
B14-govs.upt
B10-proximity
B6-handlspeed
B8-safety
B9-techinfrs
B1-shipservces
B12-landlinks
B7-risks
B15- nav&land
B11-skills
B2-shipgprices
B3-portcharges
B4-feeders
B13-logservces
B5-overallcost

the Humber
Mean
SD
2.48
0.92
3.83
0.81
3.89
0.82
3.77
0.87
3.48
0.87
3.66
0.96
3.36
0.87
3.65
0.84
3.28
1.01
3.61
0.80
3.49
0.92
3.37
0.93
3.42
1.04
3.75
0.83
3.18
0.80

Xiamen
Mean
SD
(3.57)
0.88
3.38
0.77
3.46
0.78
(4.01)
0.65
(3.70)
0.77
3.46
0.77
3.19
0.87
3.49
0.77
3.43
0.83
3.48
0.74
3.36
0.79
3.35
0.95
3.50
0.80
3.81
0.77
3.23
0.77

T value
-9.409
4.324
4.189
-2.265
-2.014
1.761
1.475
1.516
-1.225
1.341
1.146
0.144
-0.607
-0.567
-0.427

P (Sig. 2tailed)
0.000
0.000
0.000
0.025
0.046
0.080
0.141
0.131
0.222
0.181
0.253
0.886
0.544
0.571
0.670

Mean
dif
-1.10
0.44
0.44
-0.23
-0.22
0.21
0.17
0.16
-0.14
0.13
0.13
0.02
-0.08
-0.06
-0.04

95% CI
Lower
-1.325
0.241
0.230
-0.439
-0.434
-0.025
-0.056
-0.047
-0.374
-0.063
-0.095
-0.225
-0.324
-0.262
-0.245

Upper
-0.866
0.645
0.639
-0.030
-0.004
0.438
0.391
0.364
0.087
0.329
0.357
0.260
0.171
0.145
0.158

Eta
squared
0.260
0.069
0.065
0.033
0.023
0.019
0.009
0.009
0.006
0.007
0.008
0.000
0.002
0.001
0.001

Government support differed most and Xiamen performed much better than the Humber.
This was followed by proximity and speed of cargo handling, safety and port
infrastructure, in descending order. Xiamen performed much better than the Humber in
government support, safety and port infrastructure, whereas the Humber performed
much better than Xiamen in proximity and handling speed. The test results revealed no
significant differences between the performance of the Humber and that of Xiamen for
the remaining factors. The findings are consistent with the qualitative findings from
interviews, as presented in Chapter 5. Compared with the findings from Section 6.5.1, it
is noted that some factors were important, but their performance was not good.
This section has investigated the performance differences by mean among the
questionnaire factors, which is part of Research Objective Two. It has also analysed
how the factor performance varies for different ports by t-test, which is part of Research
Objective Three.

204

6.5.3 Performance difference between the case ports and other ports
In order to compare the performance between the case ports and other ports, the data of
78 responses from the Humber and 128 responses from Xiamen were used, as those
respondents provided answers to both Section B and Section C.
Tables 6.7 and 6.8 presented the performance difference between the Humber ports,
Xiamen ports, combined ports and other ports by mean. The results of gap analysis by
mean scores show that big performance gaps exist the case ports and other ports. A
paired-samples t-test was further conducted to compare the scores of port performance
between case ports and other ports in the 15 factors.
Table 6.19 reveals the test results. There were significant differences in performance
between the Humber and other ports in government support, landside links, port
infrastructure, navigation, feeders, safety, logistics services, port charges, shipping
services availability and proximity to the supplier and customers. The results revealed
no statistically significant difference in performance between the Humber ports and
other ports in the remaining factors. Among the 10 factors, only in proximity did the
Humber perform better than other ports. For all the remaining 9 factors, the other ports
performed much better than the Humber. The results from t-test are consistent with the
results from mean comparison.
The results of gap analysis by mean scores shows that big performance gaps exist
between Xiamen and other ports in 13 out of the 15 factors. There were significant
differences between them in these factors. The performance difference of landside links
between Xiamen and other ports was found as the biggest. This was followed by
shipping services, feeders, navigation, speed, government support, port infrastructure,
skills, proximity, logistics services, shipping prices, port charges and overall cost. For
all the 15 factors, Xiamen performed better than other ports only in safety. For all the
remaining 14 factors, the other ports performed much better than Xiamen.
The results of gap analysis by mean scores shows that big performance gaps existed
between sample ports and other ports in 13 out of the 15 factors. A paired samples t-test
was conducted to compare the scores of port performance between sample ports and
other ports on the 15 factors. The test results revealed statistically significant differences
in the 13 factors except proximity and risks, with other ports performing much better.
The performance difference of landside links and shipping services between sample
ports and other ports was identified as the biggest. This was followed by navigation,
205

government support, feeders, port infrastructure, speed, logistics services, port charges
skills, shipping prices, overall cost and safety.
Table 6. 19 Factor performance comparison
The
performance
vs.
performance

Humber
other

Mean

Paired differences
95% Confidence Interval
of the Difference
Std.
Deviation
Lower
Upper

ports
ports

Sig. (2tailed)

Eta
squared

Pair 14

Government support

-0.821

1.066

-1.061

-0.580

-6.798

0.000

0.375

Pair 15

Navigation &land

-0.718

1.570

-1.072

-0.364

-4.039

0.000

0.175

Pair 9

Port tech infr

-0.667

1.192

-0.935

-0.398

-4.941

0.000

0.241

Pair 12

Landside links

-0.615

1.096

-0.862

-0.368

-4.960

0.000

0.242

Pair 4

Feeders

-0.551

1.601

-0.912

-0.190

-3.042

0.003

0.107

Pair 1

Shipping services

-0.410

1.583

-0.767

-0.053

-2.289

0.025

0.064

Pair 8

Safety

-0.372

1.082

-0.616

-0.128

-3.034

0.003

0.107

Pair 13

Logistics services

-0.372

1.094

-0.619

-0.125

-3.000

0.004

0.105

Pair 3

Port charges

-0.346

1.247

-0.627

-0.065

-2.452

0.016

0.072

Pair 10

Proximity

0.282

1.216

0.008

0.556

2.049

0.044

0.052

Pair 5

Overall cost

-0.141

1.066

-0.381

0.099

-1.169

0.246

0.017

Pair 6

Handling speed

-0.051

1.092

-0.297

0.195

-0.415

0.679

0.002

Pair 2

Shipping prices

-0.038

1.167

-0.302

0.225

-0.291

0.772

0.001

Pair 7

Risks

-0.038

1.232

-0.316

0.239

-0.276

0.784

0.001

Pair 11

Skills

0.000

0.953

-0.215

0.215

0.000

1.000

0.000

.000

0.435

.000

0.454

Xiamen ports performance vs. other ports performance

Pair 12

Landside connections

-.945

1.082

-1.135

-.756

Pair 1

Shipping services

-.938

1.033

-1.118

-.757

Pair 4

Feeders

-.789

1.070

-.976

-.602

-9.887
10.269
-8.346

.000

0.354

Pair 15

Navigation

-.734

1.039

-.916

-.553

-8.000

.000

0.335

Pair 6

Speed of handling

-.672

0.973

-.842

-.502

-7.813

.000

0.325

Pair 14

Government support

-.633

1.086

-.823

-.443

-6.593

.000

0.255

Pair 9

Technical infrastructure

-.508

0.988

-.681

-.335

-5.815

.000

0.210

Pair 11

Skills

-.453

0.812

-.595

-.311

-6.314

.000

0.239

Pair 10

Proximity

-.359

1.128

-.557

-.162

-3.606

.000

0.093

Pair 13

Services of logistics

-.359

0.903

-.517

-.202

-4.505

.000

0.138

Pair 2

Shipping prices

-.344

1.007

-.520

-.168

-3.861

.000

0.105

Pair 3

Port charges

-.281

1.183

-.488

-.074

-2.689

.008

0.054

Pair 5

Overall cost

-.266

0.992

-.439

-.092

-3.030

.003

0.067

Pair 7

Risks

-.125

0.896

-.282

0.032

-1.578

.117

0.019

Pair 8

Safety

0.016
0.763
-.118
0.149
0.232
Combined sample -local ports performance vs. other ports performance
landside links
-.820
1.096
-.971
-.670
-10.74
shipping lines
-.738
1.291
-.915
-.560
-8.201
navigation & land
-.728
1.263
-.902
-.555
-8.278
government support
-.704
1.080
-.852
-.556
-9.358
feeder links
-.699
1.298
-.877
-.521
-7.730
technical infra
-.568
1.070
-.715
-.421
-7.621
speed of handling
-.437
1.061
-.583
-.291
-5.911
services of log.
-.364
.977
-.498
-.230
-5.348
port charges
-.306
1.205
-.471
-.140
-3.642
skills
-.282
.894
-.404
-.159
-4.523
freight
-.228
1.078
-.376
-.080
-3.037
overall cost
-.218
1.020
-.359
-.078
-3.075
security
-.131
.915
-.257
-.005
-2.057
proximity
-.117
1.200
-.281
.048
-1.393
risks
-.092
1.034
-.234
.050
-1.280

.817

0.000

.000
.000
.000
.000
.000
.000
.000
.000
.000
.000
.003
.002
.041
.165
.202

0.361
0.248
0.251
0.300
0.227
0.222
0.146
0.123
0.061
0.091
0.043
0.044
0.020
0.009
0.008

Pair 12
Pair 1
Pair 15
Pair 14
Pair 4
Pair 9
Pair 6
Pair 13
Pair 3
Pair 11
Pair 2
Pair 5
Pair 8
Pair 10
Pair 7

206

Gap analysis between the performance of sample ports and other ports revealed that
there were more factors with significant differences than factors with insignificant
differences, and big gaps existed between the sample ports and other ports in terms of
performance difference. Both the Humber differences and Xiamen differences shared
the same five factors (government support, landside links, feeders, navigation and port
infrastructure) out of the top seven different factors. Additionally, big gaps exist in
shipping services and speed of cargo handling for Xiamen. The big gaps indicate that
both regions do not satisfy customers compared with other ports in these factors.
Moreover, the results indicate that there were more factors that had significant
differences between Xiamen and other ports than between the Humber ports and other
ports. In other words, more differences between Xiamen and other ports were identified
than between the Humber ports and other ports.
Section 6.5.3 and Table 6.19 imply that both regions performed poorer than other ports.
The predictable results confirm that the grass is always greener on the other side.
Other ports perform much better than local ports in government support, feeders, port
technical infrastructure, navigation, landside links and shipping services. The big gaps
identified are the factors needing improvement. Hence, it has identified the key factors
that drive port performance by gap analysis between sample ports and other ports. This
is part of Research Objective One. This section has also analysed how factor
performance varies for different ports, hence it has partially addressed Research
Objective Three.
6.5.4 Difference between (C-B) of the Humber/Xiamen and other ports
The Humber performance difference (C-B) (performance difference between the
Humber ports and other ports) and the Xiamen performance difference (C-B)
(performance difference between Xiamen ports and other ports) were calculated from
the questionnaire data first. An Independent Samples t-test was then conducted to test if
there was any statistically significant difference between the two regions performance
difference between the case ports and other ports. The test results are presented in Table
6.20, which reveals significant differences in proximity, speed, shipping services, skills,
safety, landside links and shipping prices in descending order. Xiamens differences
were bigger than the Humbers except safety.

207

Table 6. 20 Performance difference comparison across regions by factors

The Humber

T value

P (Sig.
2tailed)

Mean
difference

Lower

Upper

Eta
squared

Item

Mean

SD

difCvs.B10-proximity

-0.28

1.216

Xiamen
Mea
SD
n
0.36
1.128

95% CI

-3.844

0.000

-0.64

-0.970

-0.312

0.068

difCvs.B6-handlgspeed

0.05

1.092

0.67

0.973

-4.238

0.000

-0.62

-0.909

-0.332

0.081

difCvs.B1-shipgservic

0.41

1.583

0.94

1.033

-2.622

0.010

-0.53

-0.926

-0.129

0.055

difCvs.B11-skills

0.00

0.953

0.45

0.812

-3.634

0.000

-0.45

-0.699

-0.207

0.061

difCvs.B8-safety

0.37

1.082

-0.02

0.763

2.769

0.006

0.39

0.111

0.664

0.058

difCvs.B12-landlinks

0.62

1.096

0.95

1.082

-2.113

0.036

-0.33

-0.638

-0.022

0.021

difCvs.B2-shipgprices

0.04

1.167

0.34

1.007

-1.985

0.048

-0.31

-0.608

-0.002

0.019

difCvs.B4-feeders

0.55

1.601

0.79

1.070

-1.163

0.247

-0.24

-0.643

0.167

0.011

difCvs.B14-govsupt

0.82

1.066

0.63

1.086

1.212

0.227

0.19

-0.118

0.493

0.007

difCvs.B9-techinfra

0.67

1.192

0.51

0.988

1.034

0.302

0.16

-0.144

0.462

0.005

difCvs.B5-overall cost

0.14

1.066

0.27

0.992

-0.850

0.396

-0.13

-0.414

0.164

0.004

difCvs.B7-risks

0.04

1.232

0.13

0.896

-0.539

0.591

-0.09

-0.404

0.231

0.002

difCvs.B3-portcharge

0.35

1.247

0.28

1.183

0.374

0.709

0.07

-0.277

0.407

0.001

difCvs.B15- navig.

0.72

1.570

0.73

1.039

-0.082

0.935

-0.02

-0.413

0.380

0.000

difCvs.B13-logservcs

0.37

1.094

0.36

0.903

0.088

0.930

0.01

-0.265

0.290

0.000

Generally, there were more and bigger differences between Xiamen and other ports than
between the Humber and other ports. Other ports performed much better than the
Humber in all the factors except proximity and risk management, and better than
Xiamen in all the factors except safety. Even for safety, Xiamen only performed slightly
better than other ports.
This section has analysed how the factor performance varies for different ports, this has
partly addressed Research Objective 3 from the perspective of performance difference.
6.5.5 Importance and performance analysis
This section presents importance-performance analyses. Various methods were
employed, including gap analysis, traditional IPA and revised IPAs, as explained in
Section 4.6.
Gap-analysis between importance and performance
A paired-samples t-test was conducted to compare the scores of importance and
performance of the 15 factors for the combined sample, and separate samples. The
results are presented in Table 6.21. The test results revealed a statistically significant
difference between the factor importance and performance. Combined test results
revealed significant differences in 13 out of the 15 factors. Only two factors (proximity
and safety) did not have significant difference between their importance and
performance. The mean differences revealed that overall logistics cost, government
support, landside links, port charges and feeder services were the top five factors with

208

significant differences in descending order. This was followed by other factors with big
differences.
Table 6. 21 Significant/insig difference between factor importance and performance

CombPair1
Pair 2
Pair 5
Pair 14
Pair 12
Pair 3
Pair 4
Pair 15
Pair 7
Pair 6
Pair 11
Pair 9
Pair 13
Pair 10
Pair 8
HBPair 14
Pair 2
Pair 3
Pair 1
Pair 5
Pair 7
Pair 12
Pair 8
Pair 15
Pair 9
Pair 6
Pair 4
Pair 13
Pair 11
Pair 10
XMPair 1
Pair 5
Pair 12
Pair 2
Pair 14
Pair 4
Pair 15
Pair 7
Pair 3
Pair 10
Pair 6
Pair 9
Pair 13
Pair 8
Pair 11

Avs.B shipping services

Avs. B shipping prices
Avs. B overallcost
Avs. B-governsupt
Avs. B-landlinks
Avs. B-portcharges
Avs. B-feeders
Avs. B-navig.
Avs. B-risks
Avs. B-handlspeed
Avs. B-skills
Avs. B-techinfras
Avs. B-logservices
Avs. B-proximity
A-vs. B-safety
Avs.B-government support
Avs.B-shipping prices
Avs.B-port charges
Avs.B-shipping services
Avs.B-overall cost
Avs.B-risks
Avs.B-landside connections
Avs.B-security
Avs.B-navigation
Avs.B-infrastructure
Avs.B-speed of handling
Avs.B-feeders
Avs.B-log. services
Avs.B-skills
Avs.B-proximity
Avs.B-shipping services
Avs.B-overall cost
Avs.B-landside connections
Avs.B-shipping prices
Avs.B-government support
Avs.B-feeders
Avs.B - navigation
Avs.B-risks
Avs.B-port charges
Avs.B-proximity
Avs.B-speed of handling
Avs.B-technical
infrastructure
Avs.B-services of logistics.
Avs.B-safety
Avs.B-skills

Paired differences
Std.
Mean
Deviation
0.79
1.06
0.77
1.14
0.71
1.16
0.70
1.25
0.59
1.18
0.50
1.27
0.41
1.29
0.37
1.18
0.37
1.14
0.22
1.05
-0.22
1.04
0.21
1.11
0.13
1.01
0.09
1.16
-0.03
1.07
1.03
1.39
0.99
1.08
0.97
1.17
0.84
1.15
0.63
1.09
0.53
1.11
0.40
1.19
0.37
1.08
0.36
1.38
0.35
1.18
0.26
1.03
0.25
1.48
0.16
1.04
0.10
0.93
-0.10
1.10
0.76
1.01
0.75
1.20
0.70
1.16
0.64
1.15
0.51
1.12
0.50
1.16
0.38
1.06
0.27
1.14
0.24
1.26
0.20
1.18
0.20
1.06
0.13
1.06
0.11
0.99
-0.25
1.01
-0.40
1.07

95% Confidence
Interval of
the
Lower
Upper
Difference
0.66
0.92
0.63
0.91
0.57
0.85
0.55
0.86
0.45
0.74
0.35
0.66
0.25
0.57
0.22
0.52
0.23
0.51
0.09
0.35
-0.35
-0.09
0.07
0.35
0.00
0.25
-0.05
0.24
-0.16
0.11
0.74
1.32
0.77
1.21
0.73
1.21
0.60
1.08
0.41
0.86
0.30
0.76
0.16
0.65
0.15
0.59
0.07
0.64
0.10
0.59
0.05
0.47
-0.06
0.56
-0.05
0.38
-0.09
0.29
-0.33
0.13
0.60
0.92
0.57
0.94
0.52
0.88
0.46
0.82
0.34
0.69
0.32
0.68
0.21
0.54
0.09
0.45
0.05
0.44
0.02
0.39
0.03
0.36
-0.04
0.30
-0.05
0.26
-0.41
-0.10
-0.56
-0.23

t
11.792
10.757
9.736
8.936
8.009
6.313
5.068
4.992
5.133
3.354
-3.310
2.995
1.988
1.300
-0.410
7.104
8.750
7.920
6.975
5.565
4.586
3.251
3.293
2.494
2.826
2.439
1.621
1.503
1.013
-0.853
9.528
7.983
7.662
7.100
5.815
5.488
4.532
3.027
2.441
2.197
2.367
1.551
1.343
-3.205
-4.72

Sig. (2tailed)
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.001
0.001
0.003
0.048
0.195
0.682
0.000
0.000
0.000
0.000
0.000
0.000
0.002
0.001
0.014
0.006
0.017
0.109
0.136
0.314
0.396
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.003
0.016
0.029
0.019
0.123
0.181
0.002
0.000

Eta
squared
0.356
0.315
0.272
0.239
0.202
0.136
0.092
0.089
0.094
0.042
0.041
0.034
0.015
0.007
0.001
0.357
0.457
0.408
0.348
0.254
0.188
0.104
0.106
0.064
0.081
0.061
0.028
0.024
0.011
0.008
0.265
0.202
0.189
0.167
0.118
0.107
0.075
0.035
0.023
0.019
0.022
0.009
0.007
0.039
0.081

The Humber test results reveal that there were significant differences in 11 out of the 15
factors. Only four factors (feeders, logistics services, skills and proximity) did not have
significant difference between their importance and performance. The mean differences
revealed that government support had the biggest difference. This was followed by
shipping prices, port charges, shipping services availability, overall cost, risks, landside
links, safety, navigation, infrastructure and handling speed in descending order.
Xiamen test results reveal significant differences in 13 out of the 15 factors between
their importance and performance. The mean differences revealed that shipping services,
209

overall logistics cost, landside links, shipping prices and government support were the
top five factors with significant differences in descending order.
Performance gaps were identified by measuring the difference between importance and
performance, according to O'Neill et al. (2001) and Johns (2001), who use score
difference between performance and expectation to evaluate the service quality. The
bigger the difference, the more attention needs paying to that factor.
Table 6.7 presented the mean gaps between the factor importance and performance for
combined sample and Table 6.8 presented for separate samples (for the Humber and
Xiamen respectively). The gaps indicate the difference between the customers
expectations of the port service quality and their satisfaction with the factors.
The most problematic areas for combined sample seemed to be shipping services,
shipping prices, overall logistics cost, government support, landside links and port
charges. The most problematic areas in the Humber seemed to be shipping prices,
government support, port charges, shipping services and overall cost, while the biggest
problem areas in Xiamen seemed to be shipping services, overall cost and landside links,
shipping prices and feeders. It is important to note that this tool allows for the
identification of specific problematic areas that can then be improved to help the port
authority develop a more positive view of their ports.
Comparison between explicit importance and implicit importance
To help in understanding the explicit and implicit importance, it is necessary to recover
the contents of IPA literature in Section 4.6. Explicit importance refers to the self-stated
mean score from questionnaire respondents, while implicit importance is based on the
factors correlation with an external criterion.
The importance weights differ when different importance measures are taken between
implicitly derived importance (statistically and implicitly derived from the factors, often
by correlation) and explicitly self-stated importance (Matzler et al. 2003). As addressed
in Section 4.6, there are no significant differences among the different methods to
measure explicit importance and no significant differences among the different methods
to measure implicit importance. So, in this study, direct mean rating was employed to
represent the explicit importance and bivariate correlation of Spearman was employed
to represent the implicit importance.

210

Bivariate correlation coefficients can be gained by Spearman correlation between factor

importance and factor performance, as suggested by Oliver (1997). Spearman
correlation were conducted and the results are presented in Table 6.22.
Table 6. 22 Spearman correlation between importance and performance
Humber Paired Samples
Xiamen Paired Samples
Combined Paired Samples
Correlations
Correlations
Correlations
Correla Sig.
Correlati
Correlati
Pairs
Factors
N
N
Sig.
N
Sig.
tion
on
on
Pair 1
Shipservices A1 vs. B1
92
162
0.232**
0.003
254
.178
.004
0.214*
0.041
Pair 2
Shippg rices - A2 vs. B2
92
162
0.156*
0.047
254
.143
.023
0.092
0.381
Pair 3
Port charges - A3 vs. B3
92
162
0.148
0.061
254
.103
.101
-0.008
0.936
Pair 4
Feeders -A4 vs. B4
92
162
0.125
0.114
254
.112
.074
0.101
0.336
Pair 5
Overall cost A5 vs. B5
92
162
0.006
0.937
254
.103
.100
0.146
0.165
Pair 6
Handlspeed A6 vs. B6
92
162
0.109
0.167
254
.191
.002
0.182
0.083
Pair 7
Risks A7 vs. B7
92
162
-0.077
0.331
254
.021
.734
0.155
0.139
Pair 8
Safety A8 vs. B8
92
0.344*
162
0.155*
0.049
254
.208
.001
0.001
*
Pair 9
Techinfras A9 vs. B9
92
162
0.142
0.072
254
.130
.039
0.081
0.441
Pair 10
Proximity A10 vs. B 10
92
162
0.042
0.592
254
.143
.022
0.252*
0.015
Pair 11
Skills A11 vs. B11
92
0.489*
162
0.126
0.109
254
.238
.000
0.000
*
Pair 12
Landlinks A12 vs. B12
92
162
0.022
0.780
254
.103
.101
0.175
0.095
Pair 13
LogservicesA13vs. B13
92
0.313*
162
0.205**
0.009
254
.257
.000
0.002
*
Pair 14
Govs.upt A14 vs. B14
92
162
0.136
0.085
254
.229
.000
0.088
0.406
Pair 15
Nav&land-A 15 vs. B 15
92
0.309*
162
0.217**
0.006
254
.233
.000
0.003
*
*Correlation is significant at the 0.05 level (2-tailed). ** Correlation is significant at the 0.01 level (2-tailed).

The correlation coefficients were used as implicit importance weights. The rank order
was then listed from top to bottom, represented by the rankings 1 to 15. Meanwhile the
rank order for explicit importance was also given. Lastly, Spearmans rank order
correlation between the rank orders of explicit importance and implicit importance was
conducted to test the difference. The values of correlation and significance were then
obtained, as shown in Table 6.23.
Table 6. 23 Comparison of importance rankings between explicit and implicit importance
Humber
Factor
shipservces
shipprice
portchgs
Feeders
overalcost
handlspeed
Delay
Safety
techinfr
proximity
Skills
landlinks
logservcs
govs.upt
nav&land
Spearman's
rank
corr.
Coeff
According

Xiamen
rank
Spearman
rank
Factor
mean direct rank
Rho.
rating
1
0.214
6
shipservces
4.5
1
2
0.092
12
shipprice
4
3
3
-0.008
15
portchgs
3.59
13
13
0.101
11
feeders
4
4
9
0.146
10
overalcost
3.98
5
5
0.182
7
handlspeed
3.65
12
4
0.155
9
delay
3.77
10
6
0.344
2
safety
3.75
11
8
0.081
13
techinfr
3.83
8
11
0.252
5
proximity
3.59
14
12
0.489
1
skills
3.08
15
10
0.175
8
landlinks
3.89
7
7
0.313
3
logservcs
3.91
6
15
0.011
14
govs.upt
4.09
2
14
0.309
4
Nav&land
3.8
9
2-tail
0.694
Spearman's
0.421
2-tail
signific
rank
corr.
signific
ance the
Cohenance
(1988), the correlationCoeff
coefficient determines

mean
direct
4.5
rating
4.48
4.34
3.67
3.82
4.15
4.18
4.14
3.83
3.73
3.71
3.76
3.91
3.51
3.64
-0.111

Spearman
corr
0.232coeff.
0.156
0.148
0.125
0.006
0.109
-0.077
0.155
0.142
0.042
0.126
0.022
0.205
0.229
0.217
0.118

Rank
1
5
7
10
14
11
15
6
8
12
9
13
4
2
3

to

strength of the

relationship between two factors. Cohens guidelines for interpreting correlations are
presented in Table 6.24

211

Table 6. 24 Cohens guidelines for correlation interpretation

Small

r=0.10 to 0.29

Medium

r=0.30 to 0.49

Large

r=0.50 to 1.0

According to Table 6.24, there was a low, negative correlation between the Humbers
explicit importance and implicit importance, r=-0.111, p=0.694. There was a medium,
positive correlation between Xiamens explicit importance and implicit importance,
r=0.421, p=0.118. The test results validate the findings of Crompton and Duray (1985)
and Matzler et al. (2003) that there is a difference between implicit importance weights
and explicit importance weights, and that importance weights are sensitive and they
differ depending on the method of measurement.
Importance-performance matrix
A. Traditional IPA (self-stated importance vs. self-stated performance)
The importance and performance means were employed for traditional IPA for
combined sample, the Humber and Xiamen respectively. The boundary lines to separate
the grid into four quadrants of the IPA matrix were defined by the grand means (total
averages) of the 15 factors, following Martilla and James (1997), Yavas and Shemwell
(2001), Huang et al. (2006), Deng et al. (2008) and Lin et al. (2009).

Low

Explicit performance

High

4.0
safety

3.9
3.8

logservices

3.7

techinfras

3.6

speed
proximity

3.5

others

skills

portservices
risks

shipgservices

logsupt feeders
portcharges
navigat
cost

3.4
3.3

shipgprices

landlinks

overalcost
govsupt

3.2
3.1
3.2

3.4

Low

3.6

3.8

4.0

Explicit importance

4.2

4.4

High

Figure 6. 12 Combined traditional IPA

Figure 6.12 presents the matrix of combined sample. 1. The concentrate here or
urgent action quadrant (QI). The port stakeholders perceived that shipping prices,
overall logistics cost and government support had the top priority for immediate
improvement action. 2. The keep up the good work quadrant (QII). Shipping services,
risks, feeder services, logistics services, port services and safety were good in both
212

factor importance and factor performance. 3. The possible overkill or excessive

quadrant (QIII). Skills, speed of handling, proximity and port technical infrastructure
were considered unimportant but with good performance. 4. The low priority
quadrant (QIV). Logistics support (A-factor), navigation, and landside links were the
least important. Their performance was marginally inadequate.
Figure 6.13 presents the matrix of the Humbers factor importance and performance. 1.
The concentrate here or urgent action quadrant (QI). The port stakeholders
perceived that port charges had the top priority for immediate improvement action. 2.
The keep up the good work quadrant (QII). Handling speed, safety, risks and shipping
prices, were good in both factor importance and factor performance. 3. The possible
overkill or excessive quadrant (QIII). Proximity, skills and logistics services were
considered unimportant but with good performance. 4. The low priority quadrant
(QIV). Government support, overall cost, navigation, feeders, landside links and
technical infrastructure were the least important. Their performance was marginally

Low

Explicit performance

High

inadequate.
4.0
proximity
speed
shipgservice
logservces
3.8
safety
others
s
portservices
delays
3.6
skills
shipgprices
techinf
feeders
3.4
landlinks
cost portcharges
3.2 navigat logsupt
overcost
3.0
2.8
2.6
govsupt
2.4
3.5

3.7

Low

3.9

4.1

Explicit importance

4.3

4.5

High

Figure 6. 13 The Humber traditional IPA

Figure 6.14 presents the matrix of Xiamens factor importance and performance. 1. The
urgent action quadrant. The port stakeholders perceived overall cost, shipping prices
and landside links as essential areas for improvement. This result confirmed that cost
and shipping services had a major impact on Xiamen ports good performance. They
had the top priority of immediate action for improvement. 2. The keep up the good
work quadrant. Feeders, government support, technical infrastructure and logistics
services were considered good in both importance and performance. However, it should
be noted that feeders did not significantly differ from the grand mean ratings. This
finding should therefore not be overly interpreted. It does not imply that feeders had
213

very satisfying performance. Instead, they also need careful attention for improvement.
3. The low priority quadrant: risks, port charges, speed, proximity, navigation and
skills were the least important. 4. The possible overkill or excessive quadrant.
Safety was considered unimportant with good performance. This implies that resources
for safety may be moved to other areas such as the factors in concentrate here.

safety

Explicit performance

3.9
3.7

Low

High

4.1

3.1

logservices
technifr
govsupt
logsuptfeeders
shipgservce
speed delays
s
navigat
others proximity
portcharge
shipgprices
cost
s
overalcost
landlinks
portservice
s

3.5

skills

3.3

3.0

3.5

Low

4.0

Explicit importance

High

Figure 6. 14 Xiamen traditional IPA

The category IPA is presented and summarised in Table 6.25 for both of the Humber
and Xiamen.
Table 6. 25 Categories from traditional IPA
The Humber
Xiamen
No.
Importanc
No
Item
Performance
Item
e
.
High importance high performance (Good
work: keep it up)
F6
handling speed
4.15
3.89
F9
technical infras.
F7
risks
4.18
3.65
F13
logistics services
government
F8
safety
4.14
3.77
F14
support
F1
shipping services
4.50
3.66
F2
shipping prices
4.48
3.49
High importance low performance (Priorities for action, concentrate here)
F3
port charges
4.34
3.37
F1
shipping services
F2
shipping prices
F5
overall cost
F12
landside links
Low importance high performance (Possible over-employment of resource, excessive, overkill)
F10
proximity
3.73
3.83
F8
safety
F11
skills
3.71
3.61
F13
logistics services
3.91
3.75
Low importance low performance (Low priority for improvement)
F4
feeders
3.67
3.42
F3
port charges
F5
overall cost
3.82
3.18
F6
handling speed
F9
technical infrastructure 3.83
3.48
F7
risks
F12
landside links
3.76
3.36
F10
proximity
F14
government support
3.51
2.48
F11
skills
F15
navigation
3.64
3.28
F15
navigation

3.83
3.91
4.09

Performanc
e
3.70
3.81
3.57

4.22
4.00
3.98
3.89

3.46
3.36
3.23
3.19

3.75

4.01

3.59
3.65
3.77
3.59
3.08
3.80

3.35
3.46
3.49
3.38
3.48
3.43

Importance

Note: In column No., F stands for factor from the questionnaire.

B Explicit importance vs. performance difference analysis

The analysis of importance versus performance difference (from competitors or other
ports) aims to produce the key attributes or factors to determine improvement priorities
214

by Slack et al. (2001), Slack (1994), Platts and Gregory (1992), Mangan et al. (2002),
Johns (2001), Yeo (2003), Ford et al. (1999), Yavas and Shemwell (2001) and Lin et al.
(2009). This section follows the same approach to identify the key factors that can
improve port services.
Figure 6.15 shows the analysis of factor importance and performance difference with
other ports for combined sample. 1. The concentrate here/ urgent action quadrant.
Shipping services, government support and feeder services had significant performance
difference from other ports. They were actually much worse than other ports. Hence
urgent actions need taking for improvement. 2. The keep up the good work quadrant.
Shipping prices, risks, safety, overall logistics cost and logistics services were good, as
they did not show much difference from other ports. 3. The low priority quadrant.
Landside links, navigation, technical infrastructure were here. They had the least
importance and much worse performance compared with other ports. Being unimportant,
they had low priority for improvement. 4. The overkill or excessive quadrant.
Proximity, skills and speed were located here. The stakeholders considered them not so
important, but their performances were similar to those of other ports. Efforts on them
may need transferring to other factors that need urgent actions and concentration, as
they were over performing in relations to their importance, compared with other ports.

High

0.0
-0.1 3.2
-0.2
-0.3
Explicit performance

3.4

others
skills

-0.4

3.8
proximity

risks 4.0

4.2

4.4

safety

overalcost
cost
portcharges portservices
logservices
speed

shipgprices

-0.5
techinfras

-0.6

logsupt
-0.7

navigat

-0.8
Low

3.6

govsupt/feeder

shipgservices

landsidelinks

-0.9

Low

Explicit importance

High

Figure 6. 15 Combined sample importance vs. performance

Figure 6.16 shows the analysis of factor importance and performance difference with
other ports for the Humber. 1. The concentrate here/ urgent action quadrant. Port
charges, safety and shipping services had significant performance difference from other
215

ports. They were actually much worse than other ports. Hence urgent actions need
taking for improvement. 2. The keep up the good work quadrant. Shipping prices,
handling speed and risk management were good, as they did not show much difference
from other ports. 3. The low priority quadrant. Quite a few factors such as
government support, navigation, technical infrastructure, landside links, feeders and
logistics services were here. They had the least importance and much worse
performance compared with other ports. Being unimportant, they had low priority for
improvement. 4. The overkill or excessive quadrant. Proximity, skills and overall
cost were located here. The stakeholders considered them not so important, but their
performances were similar to those of other ports. Efforts on them may need
transferring to other factors that need urgent actions and concentration, as they were
over performing in relation to their importance, compared with other ports.

High

0.0

Low

0.2

Explicit performance

0.4

-0.2

proximity
others
skills
3.5

3.7 overalcost
3.9

-0.4
-0.6
-0.8

delays
speed
4.1
4.3
portservces cost

logservices

safety

feeders
navigat
govsupt

logsupt

shipgprices
4.5

shippgservice
portcharges
s
shippgservics

landlinks
techinfrs

-1.0
Low

Explicit importance

High

Figure 6. 16 The Humber importance vs. performance (the Humber vs. other ports)

Figure 6.17 presents the factor importance and performance difference analysis for
Xiamen compared with other ports. 1. The concentrate here/ urgent action quadrant.
Shipping services, landside links, feeders, government support and technique
infrastructure had significant performance difference from other ports. They were
actually much worse than other ports. Urgent actions thus need taking for immediate
improvement. 2. The keep up for the good work quadrant. Shipping prices, logistics
services and overall cost were good in performance. They did not show much difference
from other ports, but they need maintaining at a good standard as they are important at
the same time.

216

High

0.0

Explicit performance

0.2

-0.2
-0.4

safety
3.0

skills

-0.6

4.0
overalcost
port charges
cost shipgprices
port
services
logsticsservic
proximity
others
es
technifras
speed
navigat

-0.8

Low

delays

3.5

logsupt

govsupt
feeders

landlinks shipgservices

-1.0
Low

Explicit importance

High

Figure 6. 17 Xiamen importance and performance (Xiamen ports vs. other ports)

3. The low priority quadrant. Speed of cargo handling and navigation were located
here. They had the least importance and much worse performance compared with other
ports. Being not important, they had low priority for improvement. 4. The overkill or
excessive quadrant. Skills, proximity, port charges, risks and safety were located here.
The stakeholders considered them not so important, but their performances were similar
to those of other ports. Efforts on them may need transferring to other factors that need
urgent actions and concentration, as they were over performing in relation to their
importance and compared with other ports.
Following the approach by Mangan et al. (2002), putting the IPA in another way, Table
6.26 presents the Humber analysis and Table 6.27 presents Xiamen analysis, regarding
the 15 factors.
The data of mean importance, performance 1 and performance 2 were from SPSS, and
were drawn from the descriptive analysis. The mean importance column lists the factor
importance in descending order. Perf.1 presents the mean performance rating of the
respondents own port. Perf. 2 shows the mean performance of any other ports with
which the respondents were most familiar with. Perf. Dif gives the performance
difference between the focal port and other ports. Salient shows whether the ratings of
Perf. 1 and Perf. 2 are significantly different or not. The salient factors are those
which were not only rated important, but also rated significantly different in
performance (Mangan et al. 2002). As for importance, only those whose mean
importance is greater than the grand mean can be considered as salient factors. S1
indicates that the factor is salient, S2 means the factor is potentially salient. If the
difference is large but importance is low, the factor is not considered as salient.
217

Table 6.26 shows that shipping services, port charges and handling speed are salient
factors for the Humber. Table 6.27 shows that shipping services, government support,
feeder services and landside links are salient factors for Xiamen.
Table 6. 26 The Humber mean importance ratings and identifying salient factors
Factor
mean imp.
Perf.1
perf.2
1. Shipping services
4.50
3.62
4.03
2. Shipping prices
4.48
3.49
3.53
3. Port charges
4.34
3.33
3.68
4. Risks
4.18
3.59
3.63
5. Handling speed
4.15
3.83
3.88
6. Safety
4.14
3.71
4.08
7. Logistics services
3.91
3.75
4.03
8. Technical infrastructure
3.83
3.40
4.06
9. Overall cost
3.82
3.17
3.31
10. Landside links
3.76
3.27
3.88
11. Proximity
3.73
3.82
3.54
12. Skills
3.71
3.63
3.63
13. Feeders
3.67
3.38
3.94
14. Navigation
3.64
3.10
3.82
15. Government support
3.51
2.36
3.18
Note: imp=importance; perf.=performance; perf.1=HB perf.; Perf2=other portsperf

perf. Dif.
-0.41
-0.04
-0.35
0.04
0.05
-0.37
-0.37
-0.67
-0.12
-0.61
0.28
-0.00
-0.55
-0.72
-0.82

Salient?
Yes
No
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
No
Yes
Yes
Yes

S1
S1

S1
S2
S2
S2

S2
S2
S2

Table 6. 27 Xiamen mean importance ratings and identifying salient factors

Factor
1. Shipping services
2. Government support
3. Shipping prices
4. Feeders
5. Overall cost
6. Logistics services
7. Landside links
8. Technical infrastructure
9. Navigation
10. Safety
11. Risks
12. Handling speed
13. Port charges
14. Proximity
15. Skills

mean imp.
4.22
4.09
4.00
4.00
3.98
3.91
3.89
3.83
3.80
3.75
3.77
3.65
3.59
3.59
3.08

Perf.1
3.45
3.57
3.38
3.53
3.27
3.82
3.20
3.70
3.37
4.00
3.50
3.44
3.37
3.40
3.51

Perf.2
4.39
4.20
3.73
4.32
3.54
4.18
4.14
4.21
4.10
3.99
3.63
4.11
3.65
3.76
3.96

Perf. Dif.
-0.94
-0.63
-0.35
-0.79
-0.27
-0.36
-0.95
-0.51
-0.73
0.01
-0.13
-0.67
-0.28
-0.36
-0.45

Salient?
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes

S1
S1
S2
S1
S2
S2
S1
S1
S2

S2

C. Revised IPA by employing 3-factor theory and implicit weights

Following the procedure of Matzler et al. (2003), when the implicit and explicit
importance weights were combined in a two dimensioned grid, a four quadrant grid was
produced. The explicit self-stated mean importance and implicitly derived importance
weights by Spearman correlation (Section 6.6.5) were employed. Figure 6.18 presents
the importance-performance grid for combined sample. Three factor groups were
identified. Firstly, risks, port charges and shipping prices were considered as basic
factors. They are minimum and essential requirements of port services. Secondly,
shipping services, speed, logistics services and safety were identified as very important
performance factors. Thirdly, landside links, overall logistics cost, feeder services, port
technical infrastructures and proximity were identified as low important performance
factors. Satisfaction increases linearly depending on the performance, which means
higher performance will elicit higher customer satisfaction. Fourthly, government
support, skills and navigation & land were considered as excitement factors. They are
218

either highly unexpected or not expected to be delivered at such a high performance

level, but they strongly enhance customer satisfaction.
skills
logservices

navigat

0.25

govsupt

0.20
0.15

0.05

shipgservic
es

safety
speed

proximity
feederstechinfras
landlinks
overalcost

0.10

shipgprices
port
charges
risks

0.00
3.4

Low

implicit importance

High

0.30

3.6

3.8

Low

4.0

4.2

4.4

Explicit importance

4.6

High

Figure 6. 18 Combined sample basic, performance and excitement factors (by Spearman)

Figure 6.19 presents the importance-performance grid for the Humber and its three
factor groups. Firstly, speed of cargo handling, port charges, risks and shipping prices
were considered as basic factors. They are minimum and essential requirements of port
services. They are unimportant as long as their performance is satisfying, but become
important once their performance is low. Secondly, shipping services and safety were
identified as very important performance factors. Thirdly, government support, feeders,
port technical infrastructure, overall logistics cost and landside links were identified as
low important performance factors. Satisfaction increases linearly depending on the
performance, which means higher performance will elicit higher customer satisfaction.

High

0.5

skills

0.4

others

implicit importance
Low

0.2

shipgservices

speed
landlinks portservices
overalcost
delays
feeders techinfras
cost

logsupt

0.1
0
-0.1

safety

logservices
proximity

navigat

0.3

3.4

govsupt
3.6

Low

3.8

4.0

Explicit importance

4.2

shipgprices
portcharges
4.4
4.6

High

Figure 6. 19 The Humber basic, performance and excitement factors (by Spearman)

Fourthly, skills, navigation, logistics services and proximity were considered as

excitement factors. They are either totally unexpected or not expected to be delivered at

219

such a high performance level, but they strongly enhance customer satisfaction when
their performance is high.
Figure 6.20 presents the three factor groups for Xiamen. Firstly, landside links and
overall logistics cost with low implicit and high explicit importance were considered as
basic factors. Secondly, shipping services, government support, logistics services,
shipping prices, feeders and port technical infrastructure with both high implicit and
high explicit importance were identified as very important performance factors. Thirdly,
proximity and speed of cargo handling were identified with low implicit importance and
low explicit importance as low importance performance factors. Satisfaction increases
linearly depending on the performance, which means higher performance will elicit
higher customer satisfaction. Fourthly, it should be noted that navigation is very close to
the quadrant of excitement factors. They are either totally unexpected or not expected to
be delivered at such a high performance level, although they strongly enhance customer
satisfaction.
0.25
0.2

High
implicit importance
Low

shipgservices
govsupt
logservices

navigat
safety

0.15
skills
0.1
0.05

shipgprices
logsupt
techinfras
portcharges
feeders
cost
speed
portservices
others
proximity

0
-0.05

3.0

3.5

landlinks
overalcost
4.0

delays

-0.1
Low

Explicit importance

High

Figure 6. 19 Xiamens basic, performance and excitement factors by Spearman

IPA summary
Based on the results of Figures 6.13-6.21 and Section 6.6.1, Table 6.28 is formed. The
figures show that important factors consist of urgent factors, salient factors and basic
factors from different aspects.
Comparing Figures 6.12, 6.15 and 6.18 for combined sample, comparing Figures 6.13,
6.16 and 6.19 for the Humber, and comparing Figures 6.14, 6.17 and 6.20 for Xiamen,
the urgent factors, salient factors and basic factors are different. It is found that some
basic factors in Quadrant I by revised IPA were considered as factors in Quadrant II by

220

traditional IPA. However, the results are interpretable, as they are caused by different
methods from different angles.
Table 6. 28 Summary of important and determinant factors
IPA
Traditional IPA
(explicit importance vs
explicit performance)
Revised IPA
(explicit importance vs
performance difference)
Revised IPA
(expplicit importance vs
implicit importance)

Figures
Figure 6.12
Figure 6.15
Figure 6.18
Figure 6.13
Figure 6.16
Figure 6.19
Figure 6.14
Figure 6.17
Figure 6.20

Factors
for
urgent
actions
Salient/determinant
factors
A2.,
A3, A5, A14
A1, A4, A14
A3, A7
A3
A1, A3, A8
A2, A3, A6,A7
A1, A2, A5, A12
A1, A4, A12, A14
A5, A12

Factors for keeping up the

good work
A1, A7, A13, A8
A2. A5, A7, A8, A13
A1, A2, A6, A8
A1, A2, A6,A7, A8
A2, A6, A7
A1, A8
A13, A9, A14, A4
A2, A5, A9, A13
A1, A2, A4, A9, A12, A14

Important factors
A1, A2, A3, A4,
A4, A7, A8,
A13, A14
A1, A2, A3, A6,
A7, A8
A1, A2, A4, A5,
A9, A12, A13,
A14

In the researchers personal view, traditional IPA results (explicit importance vs.
explicit performance) are preferred to revised IPA by explicit importance versus explicit
performance difference. This is because, while the importance is high, if both focal
ports and other ports perform well or poorly, the difference will be small. The small
performance difference would be ignored if both are poor, which may result in
unnecessary neglect of urgently-needed improvement. However, the analysis results
from this revised IPA are retained because they reflect the performance difference
between focal ports and other ports. The results from revised IPA by employing 3-factor
theory are also retained, as they include both explicit and implicit importance, which
means they not only consider implicit importance but also consider importance derived
from performance.
To figure out important factors rigorously, the interviews were also reviewed to
supplement the analysis. As a consequence, key factors for combined sample are
shipping services (both deep-sea and feeder services), cost (shipping prices, port
charges and overall logistics cost) and government support. Key factors for the Humber
are shipping services (deep-sea services), cost (shipping prices and port charges) and
port services (risks, handling speed and safety). Key factors for Xiamen are shipping
services (both deep-sea and feeder services), cost (shipping prices and overall logistics
cost), infrastructure (port technical and landside transport infrastructure), logistics
services and government support.
This section has identified the key factors. It is worth noting that the Humber and
Xiamen have different key factors. The results imply that different port regions under
external environment have different key factors driving port performance and choice.
This has addressed Research Objective One. It has also analysed how the factor
importance varies for different ports, which is Research Objective Three.
221

6.5.6 Differences among different respondent groups in importance and

performance recognition
As shown in the company response profile, the Humber and Xiamen share similar
percentages of response by company type over the overall responses. Hence, the
combined data from the Humber and Xiamen were employed for the difference analysis
between different company types over the recognition of factor importance and the
performance rating for the same factor.
Respondents were divided into five groups according to their disciplines. As categorised
in Chapter 4 and Section 6.2.2, Group 1 (Gp1) refers to consignors and consignees
including manufacturers, retailers and distributors, which are port end users for their
products import, export and transhipment. Group 2 (Gp2) refers to PSPs and other
service providers that help the port users to book ships or help shipping services to find
cargos or provide other port services. Group 3 (Gp3) is shipping lines that provide
shipping services of transporting the cargo from the port of origin to the destination port.
Group 4 (Gp4) is port managers that provide the port facilities and services. Group 5
(Gp5) is the group of other port stakeholders including government agencies, academics
and consultants.
As shown in Section 6.2.2, the case numbers of the five groups were not equal. The
biggest group (Gp2) had 62 observations while the smallest group (Gp5) had only 10
observations. The ratio of largest/smallest is 6.2 which is much bigger than 1.5.
According to Stevens (1996), this violates the assumption of ANOVA. However, the
Kruskal-Wallis H test can be applied to test the differences between groups of more
than two when the assumptions of ANOVA are violated. Therefore, a Kruskal-Wallis H
test was conducted to find out the differences between the different company groups
and to explore the impact of company types on factor importance recognition and rating
of port performance.
The Kruskal-Wallis H test results revealed significant differences across the different
company groups (Gp1, n=51: consignors, Gp2, n=62: PSPs, Gp3, n=32: shipping lines,
Gp4, n=49: port manager, Gp5, n=10: other port stakeholders) in the following four
factors. No significant differences existed between the other factors.
1. A2-importance of shipping prices (Chi-square=16.687, df=4, Asymp Sig. =0.002).
The group of PSPs recorded a higher median score (Md=5) than the other four groups,
which all recorded median values of 4.
222

2. A9-importance of port technical infrastructure (Chi-square=14.727, df=4, Asymp Sig.

=0.005). The group of consignors recorded a lower median score (Md=3) than the other
four groups, which all recorded median values of 4.
3. B6-performance of cargo handling speed (Chi-square=14.360, df=4, Asymp Sig.
=0.006). The group of shipping lines recorded a lower median score (Md=3) than the
other three groups, which all recorded median values of 4.
4. B9-performance of port technical infrastructure (Chi-square=9.572, df=4, Asymp Sig.
=0.048). The group of consignors recorded a lower median score (Md=3) than other
port stakerholders (Md=3.50) that accordingly recorded a lower median score than the
other three groups, which all recorded median values of 4.
Although the Kruskal-Wallis H tests revealed the significant differences across the
different company groups, they did not reveal which of the groups were statistically
different from one another. To further find out the differences, follow-up MannWhitney U tests between pairs of groups were conducted. A Bonferroni correction to
the alpha values was applied when the pairs of groups were compared with one another,
as suggested by Pallant (2007) and Field (2005) who explain that Bonferronni
adjustment involves dividing the alpha level of 0.05 by the number of tests the
researcher intends to use and using the revised alpha level as the criterion for
determining significance.
To keep the alpha level at a manageable level, instead of doing every possible
comparison, four key groups were selected for comparison. Mann-Whitney U tests were
then conducted between pairs of six groups (Gp1-2, Gp1-3, Gp1-4, Gp2-3, Gp2-4 and
Gp3-4). Therefore the current research means a stricter alpha level of 0.05/6=0.008.
Table 6. 28 Significant difference between pairs of company groups

Factors
A2-shipprices

A9-techinfras

B6-handlspeed

B9-techinfras

Groups

1st
Gp
MD

1st Gp
mean
rank

1st
Gp
N

2nd
Gp
MD

2nd Gp
mean
rank

2nd
Gp N

U value

Z value

P value

R
value

Gp1-Gp2

50.62

51

62.25

62

1255.5

-2.108

0.035

-0.198

Gp2-Gp3

53.09

62

36.67

32

645.5

-3.068

0.002

-0.316

Gp2-Gp4

64.41

62

45.36

49

997.5

-3.397

0.001

-0.322

Gp1-Gp2

46.54

51

65.60

62

1047.5

-3.222

0.001

-0.303

Gp1-Gp3

36.78

51

50.31

32

550.0

-2.608

0.009

-0.286

Gp1-Gp4

44.85

51

56.38

49

961.5

-2.115

0.034

-0.211

Gp1-Gp4

42.71

51

58.61

49

852.0

-2.977

0.003

-0.298

Gp2-Gp4

49.43

62

64.32

49

1111.5

-2.603

0.009

-0.247

Gp3-Gp4

30.98

32

47.54

49

463.5

-3.294

0.001

-0.366

Gp1-Gp4

42.35

51

58.98

49

834.0

-3.089

0.002

-0.309

223

The results in Table 6.29 show that there were statistically significant differences
between different pairs of groups for the above mentioned different factors. This table
reveals that different pairs of company groups had different views on their recognition
of factor importance and factor performances.
For importance of shipping prices, PSPs considered it significantly more important than
consignors, shipping lines and port managers. Regarding port infrastructure,
consignors/consignees considered it significantly less important than PSPs, shipping
lines and port managers. Port managers/operators evaluated its performance of handling
speed and technical infrastructure much higher than cargo interests, PSPs and shipping
lines. This implies that port service providers consider their performance much better
than port service users. This finding is consistent with the literature by Murphy et al.
(1992) who note that freight forwarders, consignors, ferry operators and port managers
evaluate the port selection factors differently. However, it should be acknowledged that
for most other factors, different port stakeholders did not evaluate their importance and
performance significantly different.
6.5.7 Overall comparative analysis
Sections 6.1.1 to 6.5.6 have presented a detailed comparative analysis between factor
importance, performance and other ports performance both within each ports region
and across regions respectively. This section will give a summary report on the overall
comparison.
Figures 6.21 and 6.22 give an overview of the respondents evaluation of the factor
importance and performance from the Humber and Xiamen respectively.
HB imp.

HB perf.

HB other ports perf.

5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

Figure 6. 20 The Humber comparison overview

224

XM imp.

XM perf.

XM other ports perf.

5.00
4.00
3.00
2.00
1.00
0.00

Figure 6. 21 Xiamen comparison overview

For both of the Humber and Xiamen, the importance was ranked almost the highest
among the three sections. Compared with the performance satisfaction, the other ports
actually performed better than focal ports. Both of the Humber/Xiamen and other ports
performances did not meet the customers expectation as the mean performances were
lower than the mean importance.
Significant/insignificant difference comparison
Table 6.7 presents a comparison summary from the highest score to the lowest score
within groups in mean descending order of mean to explore the extent of the differences
or similarities between the Humber and Xiamen or within regions. Table 6.30 presents a
statistical summary of the difference between factor importance, factor performance and
between different regions.

Insig. Diff

Sig. Diff

Table 6. 29 Significant/insignificant difference comparison summary by factor

A
(HB vs. XM)
A3
A11
A14
A6
A2
A7
A8
A4
A1

B
(HB vs. XM )
B14
B10
B6
B8
B9

C
(HB vs. XM )
C14
C1
C11
C4
C12

(C-B)
(HB vs. XM)
(C-B)10
(C-B)6
(C-B)1
(C-B)11
(C-B)8
(C-B)12
(C-B)2

HB
(C vs. B)
Pair14
Pair12
Pair9
Pair15
Pair4
Pair8
Pair13
Pair3
Pair1
Pair10

A5
A15
A10
A12
A13
A9

B1
B12
B7
B15
B11
B2
B3
B4
B13
B5

C15
C5
C6
C2
C10
C13
C9
C8
C3
C7

(C-B)4
(C-B)5
(C-B)7
(C-B)15
(C-B)3
(C-B)13
(C-B)9
(C-B)14

Pair5
Pair6
Pair2
Pair7
Pair11

225

XM
(C vs. B)
Pair12
Pair1
Pair4
Pair15
Pair6
Pair14
Pair9
Pair11
Pair10
Pair13
Pair2
Pair3
Pair5
Pair7
Pair8

HB
(A vs. B)
Pair14
Pair2
Pair3
Pair1
Pair5
Pair7
Pair12
Pair8
Pair15
Pair9
Pair6

XM
(A vs. B)
Pair1
Pair5
Pair12
Pair2
Pair14
Pair4
Pair15
Pair7
Pair3
Pair10
Pair6

Pair4
Pair13
Pair11
Pair10

Pair9
Pair13
Pair8
Pair11

Section 6.6.1 shows factor importance comparisons. Section 6.6.2 on port performance
and 6.6.3 on performance difference imply that both the Humber and Xiamen need
performance improvement on overall cost, port charges and landside links. In addition,
the Humber needs performance improvement in government support and navigation,
while Xiamen needs improvement on shipping prices and hinterland expansion.
Different company groups were found to have different perceptions of importance and
performance in some factors.
6.6 Comments from respondents
Apart from the closed questions, the respondents were asked to answer some open
questions. Table 6.30 presents the respondents profile for each open question.
Table 6. 30 Respondents profile over open questions
Other ports performance

Questions

Other factor to inf. port perf.

Region

No.
of
responses

%
of
response

No.
responses

The
Humber
Xiamen

26

28.26%

79

48.77%

of

overview of comments
of

total
responses

%
of
response

No.
responses

%
of
response

19

20.65%

21

22.83%

92

21

12.96%

12

7.40%

162

6.6.1 Factors influencing port performance

The respondents were asked to give any other factors they thought would influence their
port performance. Twenty-six out of the 92 Humber respondents (response rate=28.26%)
answered this question. Eleven Humber respondents noted that road/rail connections to
the ports are critical, as heavy road congestion would influence port performance. Three
respondents commented that waterway links to the ports are important to reduce carbon
footprint, reduce cost and alleviate the land traffic burden. Three respondents
highlighted that 24hours/7day service of the terminals is critical. Two respondents
thought speed of reaction and vessel turnaround time were important factors to
influence port performance. Two respondents considered port infrastructure such as size
of the lock and length of the quay to be essential to port performance, as they would
restrict the vessel call at the port. Two respondents thought the port managers are
important and should be proactive in working with customers/tenants to attract new
business to the region and make investment to the ports to satisfy the clients. Two
respondents answered that government support is important to lead the country out of
the recession and support trade so that port performance could be improved.

226

Xiamens respondents made 97 comments on the factors to influence port performance.

Twenty-eight out of the 97 comments (29%) were on the size of hinterland, the local
economy and the hinterland economy. The second biggest group of comments were on
government support and whether the government would have a strategic scheme on the
regional port development. Sixteen responses emphasized the role of government. The
third biggest group of comments were on services such as customs clearance and border
cargo inspection. Respondents highlighted speed, documentation and value-added
services, which influence efficiency. This was followed by coordination and partnership
between the different port stakeholders such as consignors, shipping services and PSPs,
between the proximate ports and between the ports and free trade zones. Professional
skills and management levels were considered as an important factor as well, including
the different levels of personnel who were involved in port performance such as the
managers knowledge and operators skills.
Most of the factors given actually belong to the 15 factors listed in the questionnaire.
Additional factors were given as:

short sea operators

trucking supply
availability of warehouse space
competition, innovation and spectacular investment
postponed manufacturing facilities and local commitment
efficient ports convenience to consignee and consignor's
port ownership
foreign lorry drivers using UK ports and roads
bigger scale ships
weather
large scale enterprise and exporting enterprise
local enterprises with export orientation
sense of service
fair competitive environment
product quality and product seasoning
the city positioning
service efficiency
developed level of rail/road/air
standardization
low/no entry barrier
trade mode and trade partners
the inter-provincial transport service and network
cargo types
227

These factors are findings from this research, which are invaluable for future research.
6.6.2 The performance of the Humber and Xiamen ports
When the respondents were asked to evaluate their own ports performance apart from
the 15 factors, 19 out of the 92 Humber respondents (20.7%) and 21 out of the 162
respondents (13%) gave their answers to this open question.
Six Humber respondents commented that the performance on ports road connections
and access to motorways was poor, with severe congestion in some areas. Three
respondents considered the railway links to the ports were restricted, insufficient and
poor. The waterway and canal connection in this region was considered rather good but
not put into use. Other responses were:

Limited systems integration

Insufficient Haulage and trucking
Good canal connection
Very good depth of channel navigation in Hull and Immingham
Very poor land availability
Low profile, reduced impact and not internationally recognised at all
Inconsistency on business rates issue has wrecked confidence
Limited destinations as primarily a fishing port
Hull is well placed for trade from Europe into the Midlands and northern
England.

In Xiamen, 19 respondents evaluated the customs and border cargo inspection. They
thought Xiamen performed poorly with low efficiency in this regard. They realised
Xiamens geographical location advantage, which enabled the direct and transhipment
to Taiwan. The concept of Haixi economy would bring benefit to Xiamen with the
support of government policy. The respondents also understood that the freight would
change as season changes. It was also noted that rail and air connections in Xiamen are
not too favourable. The findings are consistent with the findings from interviews, as
stated in Chapter 5.
As few respondents provided comments on other ports performance, their comments
will not be included in the analysis.
6.6.3 Overall comments
In the Humber, when the respondents were asked to make comments on the whole
questionnaire, 7 out of the 21 respondents commented about the high cost and charges
at the Humber ports. The port charges are comparatively much higher than other ports
228

operated by its competitor of PD ports. The respondents made some other comments:
Further detailed research is required such as berth availability, dock or riverside
facilities. The cost of shipping services is governed by the outside world, which is a
competitive market.
In Xiamen, the responses were quite different. Five out of the 12 respondents (41.7%)
answered that local economy and hinterlands economy are of high importance to
consider for port performance as economy is the factor based on which decisions are
made. Four out of the 12 respondents (33%) considered border management such as
custom clearance efficiency, and cargo inspection at the border of the utmost
importance. Consignors requests should be considered, as the port is no longer an
isolated entity but one point on the supply chain. Xiamens geographical location and
environment should be researched, as this is helpful and practical to the port
development. The government factor is seen as important, and it needs more detailed
investigation.
6.7 Chapter summary
This chapter has analysed the data from the questionnaires. Descriptive and distribution
statistics were presented after data preparation. This was followed by factor analysis of
importance factors, and then comparative analysis was conducted based on the
questionnaire factors. The main findings from the questionnaire may be summarised as:
1. For the combined sample, five aggregate factors were extracted from the 15
questionnaire factors in descending order of importance: port services, logistics
support, cost, shipping services and others. Services and logistics support rather
than facilities and labour were considered important.
2. The self-stated factor importance shows that shipping services, shipping prices,
port charges, safety, speed and risks are important factors for the Humber in
hierarchical order. In Xiamen, the factor importance order is shipping services,
government support, shipping prices, feeder services, overall logistics cost,
logistics services, landside links and port infrastructure.
3. Traditional IPA findings reveal clearly on which factors urgent actions are
needed; which ones need keeping up the good work; which ones have low
priority for improvement and which ones may be excessive. Port charges was
identified as the urgent factor in the Humber, while landside links to the
hinterland, overall logistics costs, shipping services, shipping prices and feeder
229

services were identified as urgent factors in Xiamen. These urgent factors are the
ones with high importance but low performance.
4. Compared with the performance difference, the salient factors are shipping
services, port charges and safety in the Humber, and shipping services, feeders,
government support and landside links to the hinterland in Xiamen.
5. Compared with the performance of other ports and factor importance, the
performances of both Humber and Xiamen ports are deemed poorer than
customer expectation and poorer than competitors.
6. Among the 15 factors performance, four out of the top 6 poorly performed
factors were the same for both Humber and Xiamen: overall cost, landside links,
port charges, navigation. Both port regions need to improve performance on cost
and shipping services. Additionally, the Humber needs to improve the logistics
support on landside transport infrastructure, government support and feeder
services, and Xiamen needs to improve proximity and skills.
7. The findings from this study validate the claim in the literature that IPA matrixes
are different depending on whether the importance is self-stated or implicitly
derived. There is no significant difference among the statistical methods for
deriving importance weights, but there are differences between the results from
self-stated importance and implicitly derived importance.
8. Revised IPA results show that the Humber needs to improve shipping prices,
port charges, speed and risks urgently while Xiamen needs to take urgent actions
on landside links, overall cost, shipping prices and port technical infrastructure.
9. IPA results show that different regions under different economic environments
and different cultures have different urgent factors, salient factors, basic factors,
performance factors and excitement factors that affect port performance.
10. There are significant differences between the Humber and Xiamens
performance difference (focal ports vs. other ports) in proximity, speed of cargo
handling, shipping services, skills, safety, landside links and shipping prices in
descending order. Xiamens gaps are significantly bigger than the Humbers
gaps except safety of cargo handling.
11. The findings reveal that there exist some significant differences between the
company groups in their perception of factor importance and performance, such
as importance of shipping prices and port technical infrastructure, and
performance of handling speed and port technical infrastructure.
230

12. Regarding performance comparison, both of the Humber and Xiamen ports need
to improve shipping services, because its performance was not rated as very
satisfactory, although it was recognised as the most important factor. Secondly,
both regions need to improve the performance of cost, including all the cost
factors, but the importance hierarchy is not the same. Thirdly, logistics support
needs improving. The Humber needs to improve government support, as the
scores of government support in the Humber importance, performance and other
ports performance were all rated as the lowest among the 15 factors. The
Humber also needs to improve navigation, feeders and landside links. Xiamen
needs to improve landside links, navigation and government support, too.
Finally, the Humber needs to improve its port infrastructure while Xiamen needs
to improve its speed of cargo handling and hinterland expansion.
The empirical research analysis results from Chapters 5 and 6 have identified what
factors influence port performance, what different factors influence port performance in
the different contexts, and how differently the different port regions perform in terms of
those important factors. The findings will be discussed and elaborated further in relation
to the supporting literature in Chapter 7.

231

7. DISCUSSION ON FACTORS INFLUENCING PORT

PERFORMANCE
Chapters 5 and 6 analysed the data from interviews and questionnaires respectively. The
empirical research has identified some of the issues in enhancing port performance in
China and the UK. This chapter is based upon the data analysis and discusses the main
findings from the previous two chapters in a more focused manner within the context of
relevant literature, and interprets the findings in an attempt to probe the underlying
principles, thereby contributing to theory and practice. This chapter aims to address the
research objectives described in Chapters 1 and 4, namely, to:
1. Identify the key factors that drive port performance and choice.
2. Investigate the differences in importance and performance among these factors.
3. Analyse how the factor importance and performance vary for different ports.
4. Analyse the role port hinterland plays in port performance and choice.
5. Illustrate the usefulness of the key findings from the analysis for port stakeholders.

The key findings will be discussed in sub-sections 7.1 through to 7.5, based on the five
research objectives.
7.1 Key factors determining port performance and choice
The key factors influencing port performance and choice are presented in Figure 7.1
based on the combined sample.
7.1.1 Key factors cross-validated by a questionnaire and interviews
This research investigated factors that determine port performance using several
techniques including factor analysis, explicit importance, gap analysis, traditional IPA
(importance-performance matrix by explicit importance vs. explicit performance),
revised IPA (explicit importance vs. performance difference), and revised IPA by
employing 3-factor theory (implicit importance vs. explicit importance) that concentrate
on customer quality. Descriptive analysis, statistical validity and significant tests were
conducted to identify the significant differences. These techniques use a construct for
measuring factor importance, which is based on the literature, such as De Langen
(2003), Wang and Oliver (2003), Lirn et al. (2004), Bichou and Gray (2004), Gordon et
al. (2005), UNCTAD (2005), Notteboom and Rodridgue (2005), Bichou (2006),
Robinson (2006), Tongzon (2007), Ducruet et al (2008), Weigmans et al. (2008), Wu
(2008), Wu and Huang (2008), Arvis et al. (2010). No particular construct by a single

232

(a)

Research flow
(b) Factor analysis
2.Literature
review

3. Methodology
Interviews(Phase1) Questionnaire (phase 2)
(Jan.-Mar. 2009)
(May-Jul.2009)
(1) HB+XM 20 each 92 out of 200 resp.HB
162 out of 300 reso.XM
Thematic analysis
Factor analysis, T-test,
IPA, descriptive, etc.
For combined and separate data

Shippgprices
portcharges

5. Contributions and implications

Cost

safety
Portinfrastruct
handlspeed

Logservices
Feederservice

Excitemt factors

Imp. perf. Factors

F10 Proximity
F11 Skills
F13Logistics services
F14Government supt
F15 Navig.

F1Shipping services
F2 Shipping prices
F6 Handling speed
F8 Safety

govmtsupt
landlinks
Nav&land

Unimp. Perf. Factors

Basic factors

F4 Feeder services
F5 Overallcost
F9 Port technifras
F12Landsidelinks

F3 Port charges
F5 Overall cost
F7 Risks

Low

Explicit importance

Proximity

Others

High

(i) Revised IPA by 3-factor theory

Risks

Port services

Factors for port importance

Overalcost

4Findings + discussions

Low Implicit importance

Shipping
services

Shippgservce

Logistics support

1.Background
+ significance

Skills

(c). Explicit importance by mean

F1 Shipping services
F2 Shipping prices
F5 Overall logistics cost
F7 Risks
F13Logistics services
F8 Safety
F4 Feeder services
F14 Government support

(d).Explicit performance by mean

F8 Safety
F13 Logistics services
F9 Port infrastructure
F6 Speed of cargo handling
F7 Risks
F10 Proximity
F1 Shipping services
F11 Skills

(e). Gap analysis (imp. vs. perf. sig)

F1 Shipping services
F2 Shipping prices
F5 Overall logistics cost
F14 Government support
F12 Landside links
F3 Port charges
F10 & F8 not sig.

(f). Gap analysis (perf.. vs. operf.)

F12 Landside links
F1 Shipping services
F15 Navigation & land
F14 Government support
F4 Feeder services
F9 Port infrastructure
F10&F7 not sig.

(g). Traditional IPA urgent

factors (exp.imp.vs. exp. perf.
for urgent actions)
F2
F3
F4
F5
F14

(h). Revised IPA salient factors

(imp. vs. perf.)
F1 Shipping services
F4 Feeder services
F14Government support
F: factor

(j) Key interview qualitative

insights
hinterland economy, external
environments (political, social,
cultural,
historical,
environmental factors), customs
services, management level and
logistics
skills,
location,
government
support,
port
ownerships, port charges and
landside links are key factors
influencing port performance.

(K) Sig. differences

company groups
A2, A9, B6, B9

High

Figure 7. 1 Research flow and factors influencing port performance and choice by combined sample

233

Shipping prices
Port charges
Feeder services
Overall logistics cost
Government support

between

author was followed but different constructs were considered and refined to meet the
specific needs of this research. The constructs focus on indicators of port performance
and components of port competitiveness on ports.
Figure 7.1a summarises the research flow. The questionnaire construct used in this
research consisted of 15 factors that were categorised into five aggregate factors based
on combined data: port services, logistics support, cost, shipping services and others, as
shown in Figures 6.9 and 7.1b. Experts on ports and academics confirmed the reliability
and validity of the aforementioned construct. Reference to the literature and Phase 1
interviews ensured that the factors were relevant to port performance and to the research
objectives. Statistical tests were then used to investigate the reliability and validity of
the questionnaire construct. This research investigated the factor importance from
several perspectives, trying to identify the factors that influence or determine port
performance.
The results from factor analysis show that four aggregate factors of shipping services,
cost, port services, and logistics support are important in descending order, according to
their aggregate means and percentage of variance. The explicit importance means from
the combined sample reveal that shipping services, shipping prices, overall logistics cost,
risks, logistics services, safety, feeder services and government support are important
factors as their means are bigger than the grand means (Figure 7.1c). Traditional IPA
identified that shipping prices, port charges, feeder services, overall logistics cost and
government support are urgent factors with high importance and low performance
(Figures 6.13 and 7.1g). According to the revised IPA, shipping services, feeder
services and government support are salient factors compared with other ports
performance (Figures 6.16 and 7.1h).
Gap analysis aims to investigate the factors that need improving. Two gap analyses
were conducted: gap between importance and performance and gap between
performance of focal ports and that of other ports. The gap analysis between importance
and performance identifies the areas to improve service quality (Johns 2001; O'Neill et
al. 2001). The results of Section 6.5.5 show that the respondents had a perceptual
problem with their focal ports, as there were large gaps between the performance and
their expectation, which led to customer dissatisfaction. There were no significant
differences in 2 factors (proximity and safety) but there were significant differences in
the remaining 13 out of 15 factors. Apart from shipping services, government support
and landside links, large gaps existed between satisfaction and expectation in shipping
234

prices, port charges and overall cost (Figure 7.1e), and considerable performance gaps
existed between focal ports and other ports in feeder services, port infrastructure and
navigation (Figure 7.1f).
The three-factor theory of customer satisfaction suggests that the relationships between
attribute performance (satisfaction) and importance are non-linear (Matzler et al. 2003).
Three-factor theory categorises factors influencing port performance into basic factors,
excitement factors and performance factors. The revised IPA employing 3-factor theory
(Figure 7.1i) shows that port charges, risks and overall logistics cost are basic factors.
Skills, proximity, government support, navigation, and logistics services are excitement
factors. The remaining factors are performance factors.
Although different important factors were identified by different techniques, generally
these urgent factors, salient factors and basic factors share some common features. It is
found in general that shipping services (both deep-sea and feeder services), cost
(shipping prices, port charges and overall logistics cost), logistics support (government
support), port services (risks, logistics services) and infrastructure (landside links) are
important factors influencing port performance. In the following paragraphs, these
factors are discussed one by one.
Shipping services: The interview results reveal that both Humber and Xiamen
interviewees considered the shipping services (both deep-sea and feeder services)
critically important (Section 5.5). This finding was validated by questionnaire findings:
firstly, the results of factor loading show that shipping services are very important
factors. Secondly, questionnaire respondents considered shipping services as an
important factor among the aggregate factors and questionnaire factors by mean
(Section 6.6.1 and Figure 7.1c). Thirdly, results from gap analysis show that they are
important factors that need improving (Section 6.6.5, Figures 7.1e and 7.1f). Fourthly,
the traditional IPA matrix shows that shipping services fall in the quadrant of urgent
actions (Section 6.5.5A and Figure 7.1g). Finally, revised IPA analysis by considering
explicit importance and explicit performance difference (6.5.5B and Figure 7.1h)
confirms that shipping services are salient factors.
More shipping lines with more frequency can attract more customers and more cargoes
so that port cargo volume/throughput can be increased. Customers are particularly
concerned about the cargos in-transit time, which has become increasingly important to
reduce stock and save cost in the current global supply chain context.
235

This finding is consistent with the literature. Gordon et al. (2005) note that the variety of
shipping routes and shipping options are very important for the enhancement of port
performance. Similarly, the literature has addressed that ship direct calling (Brooks
1985), number of ships (Carbone and Gouvernal 2007), container transport routes of
port connectivity in the world (Slack 1985; Brooks 1985; Gordon et al. 2005; Tongzon
2009; Arvis et al. 2010), and frequency of vessel calls at port (Gordon et al. 2005) are
all components for port competitiveness. Moreover, Lam and Yap (2008) find that
connectivity is one of the most important criteria for port choice. The authors have all
addressed that seaside connections are important for port performance.
For carrier operations, apart from frequency and destinations of shipping services to the
deep-sea ports with multiple destinations, the feeder services are important to the short
sea shipment, as the importance mean (3.88) is above the grand mean. The importance
was also reflected during the interviews and the findings confirm claims of Gordon et al.
(2005) that feeder operations are important.
Carriers contribute to port development by sea transport, investing and operating in the
ports, particularly after containerisation (Souza et al. 2003; Cullinane 2004; Notteboom
2006). As shipping lines are ports major customers (Gordon et al. 2005), only by
enhancing the cooperation between ports and shipping lines can port performance be
improved, port and shipping lines play their roles and show their advantages in the
logistics development, and the logistics system develop smoothly. Thus availability of
shipping services including feeder connections is important for port performance.
Cost: Cost is identified as an important factor that drives port performance. In this
research, cost consists of shipping prices, port charges and overall logistics cost from
shippers to customers. The interview interviewees explained that Xiamen has attracted
customers by the very important way of reducing port charges and cargo handling fees,
while the Humber has lost some customers due to high port charges. Most interviewees
highlighted the importance of logistics costs. This finding was validated by the
questionnaire factor analysis (Section 6.4) which shows that cost was the second most
important A-factor. Factor mean scores (Table 6.7) show it was above average.
Traditional IPA showed it was a factor for urgent action (Section 6.5.5A). Revised IPA
showed it was a basic factor (Section 6.5.5C). They all validated the importance of cost.
The findings support the literature. Porter (1980) treats cost leadership as one of his
three generic strategies, which are the most successful competitive strategies that firms
236

pursue. Lirn et al. (2003) and Tongzon & Heng (2005) note that cargo handling charges
are justified determinants of port competitiveness. Hongkong has been losing handling
volume to Shenzhen due to its high port costs, exemplifying the importance of costs.
As labour costs account for about 60% of the total operating costs for container terminal
operators (Baird 1999), the investment in port facilities such as labour saving equipment
and IT system could save handling cost (Lirn et al. 2004). Some port operators, such as
Hutchison Port Holdings (HPH), have invested in port terminals worldwide to attract
more carriers and shippers to reduce cost. HPH has expanded its business into 25
countries and territories in Mainland China, Southeast Asia, the Middle East, Africa,
Europe and America. Presently, Hutchison Whampoa owns 49 ports and 300 berths
worldwide (Dreary 2008). China Merchants Group is another example of port operators
that save cost by means of investing and operating in 53 berths in Hong Kong,
Shenzhen, Xiamen, Ningbo, Qingdao and Tianjin. Lu and Yang (2006) note that cost is
a critical factor for manufacturers making investment decisions in international logistics
zones.
Reduction of port charges is an effective way to reduce the customers cost and attract
shippers and carriers. Typical examples are Pusan and Kwangyang (www.ce5e.cn).
Kaohsiung is another example to keep its customers by reducing port charges. The
conduct of practitioners implies that port charges are important for port competitiveness.
Logistics support: Being an important component of logistics support, government
support was highlighted in importance by interviewees (Section 5.2). Factor analysis
(Section 6.4), mean scores (Table 6.7), traditional IPA matrix, revised IPA matrix with
performance difference (6.5.5A) and revised IPA basic factors entirely cross-validate
the importance of government support. The results of gap analyses show that
government support needs improving to narrow the gap between satisfaction and
expectation (Figure 7.1e) and the performance gap between focal ports and other ports
(Sections 6.5.5 and 6.5.3, Figure 7.1f).
The importance of government support was not only highlighted by Xiamen. In the
Humber, although the questionnaire mean scores of factor importance were very low,
the results of gap analyses show that Humber stakeholders were not happy with their
government support compared with their expectations and compared with other ports
performance. This implies that the Humber stakeholders expected the government
support to be improved.
237

The findings support claims in the literature that governments ensure good port
performance to achieve the objectives that governments have set for the port (Brooks
and Pallis 2008). Government support can encourage international trade to increase
currency as country wealth. In China and many other countries worldwide, bonded areas
or logistics parks enjoy a policy benefit on tax, as in the cases of Hongkong and
Singapore (Section 3.3).
Government is supposed to guide the social allocation of human, material and financial
resources so that the structure of regional economy and relevant sectors such as
agriculture, industry, communication, logistics and services can be optimized and the
resources can be utilized efficiently. Regarding the support to port performance,
government's economic management functions are primarily to develop and implement
the national macro-control policies, improve infrastructure and create a favourable
environment for economic development. Meanwhile, government should help with fair
competition and regulate social distribution. However, government is not supposed to
interfere directly with the production and business activities of ports.
Keynes (1936) claims that government should intervene in the market economy as a
visible hand. This indicates that government has coercive power over the market by
limiting imports and encouraging exports. It once contributed significantly to the UK
and Frances commercial and industrial development. However, Adam, the father of
economics, held the counter view that government should not intervene in economic
activities as an invisible hand but encourage free market competition (Gramp 2000).
Government inaction in relation to the ports has promoted port development to a certain
degree. However, the pure market economy may result in serious problems, such as the
global economic crisis during 1929-1933. In the 1970s, a school of moderate
government intervention in the economy emerged. Its proponents claim that a market
economy should develop freely with moderate government intervention. This approach
enabled the US economy to develop very fast. In the World Development Report 1991
prepared by the World Bank, the interaction and relationship between government and
market was discussed and a consensus was reached in favour of a market-friendly
approach that government should intervene reluctantly, apply checks and balances, and
intervene transparently and simply (World Bank 1991).
The ways in which government controls and influences port development vary from
country to country, depending largely on the level of government direct involvement in
238

the port business. The relationship between government support and port performance
as a market is a very controversial topic. It is generally believed that a market economy
is a free mechanism without government intervention. This is not true, because
government is generally a part of the market economy, where people have different
relationships requiring certain rules to coordinate with each other, and the rules should
be stipulated by the government (Huang 2008). Tongzon (2007) notes that government
support is a very important factor for Singapores efficient port performance. This is
why the research would hold the view that government should intervene port
performance to a certain degree.
Infrastructure: Logistics is infrastructure-related (Luo et al. 2001). Infrastructure
includes both hard infrastructure and soft infrastructure. Both can be catalysts that
drive port performance once properly provided, or can be barriers that hinder logistics
performance if they are not available. Infrastructure in this research includes port
natural conditions (such as navigation), transport infrastructure (such as landside links)
and port technical infrastructure such as the loading and unloading facilities, and
information system. However, the soft infrastructure such as legal and financial
institutions were excluded due to time and data constraints.
The findings (Figure 7.1f) support the literature on the importance of loading and
unloading facilities, quay/yard cranes and other equipment (Willingale 1981; Murphy et
al. 1991; 1992; Starr 1994; McCalla 1994; Gordon et al. 2005; World Bank; Wu 2008).
Song and Yeo (2004) emphasise ports natural conditions and claim that port facilities
are deemed capable of manipulation. Notteboom and Rodrigue (2005) explore that port
regionalisation requires a broader regional load centre networks to serve large logistics
poles; hence, a more powerful IT system and the knowledge capability to handle it are
required. Since port performance involves many stakeholders, the IT system would
serve them in a systematic way.
Xiamen Interviewee 9 commented that port infrastructure including port natural
endowment, such as the number of container terminals, port loading and unloading
capacity, size of the terminal yard and the depth of navigation channel, can be improved
by proper investment. He claimed that,
It is not a problem if it can be solved by money. The terminal facilities, the depth of navigation, and
so on can be improved if the investment is available.

The interviewees in both the Humber and Xiamen also considered transport
infrastructure as important (Section 5.4). The finding was validated by the questionnaire
239

results (Figures 7.1e and 7.1f), which support the review of Song and Yeo (2004) that
port physical infrastructure is the second most important factor for port competitiveness,
after volume.
The finding also supports Notteboom and Rodrigue (2005) and Arvis et al. (2010) in
terms of landside connections and inland transport speed; supports Slack (1985),
UNCTAD (1992) and McCalla (1994), Joly and Martell (2003) in terms of
intermodalism/inter-linked transportation networks/hinterland networks and availability
of transportation. Luo et al. (2001) use infrastructure as a potential factor in shaping the
logistics differences between different countries. Pettit and Beresford (2008) identify
that inland connectivity is a powerful determinant of port performance in the UK, and
Lam and Yap (2008) confirm the crucial importance of connectivity.
Port services were identified as important by interviewees (Section 5.8). This was
validated by questionnaire results (Sections 6.5.1, 6.5.5 and Figure 7.1). The findings
support other studies on services, which include a wide range of contents, such as
customs service (Bichou 2006; Arvis et al. 2010), port operations efficiency, namely,
ship loading/unloading service, pick-up and delivery service (Talley 1996; Gordon et al.
2005; UNCTAD, 2005), labour efficiency (Talley 1996; Gordon et al. 2005; Wu 2008;
Arvis et al. 2010), responsiveness to customers (AAPA 2005), flexibility (Gordon et al.
2005),

warehousing

management

service

(Wu

2008),

port

reliability

for

channel/berth/gate access (Talley 1996), complexity (Arvis et al. 2010), and risk
management on port congestion/ cargo damage/cargo loss (Brooks 1984; 1985; Slack
1985; Murphy et al. 1988; 1989; 1991; 1992; Talley 1996).
Apart from customs services, Section 5.8 addressed the importance of logistics services
on speed, risk and safety. This is consistent with the literature that although Shenzhen
has a much lower cost (250USD/40TEU), many customers still choose Hongkong rather
than Shenzhen because of Hongkongs high speed of cargo handling and its high
efficiency. It also enhances the literature by Yeo et al. (2008) that service and port
management have become an important criteria for port competitiveness.
7.1.2 Other key factors influencing port performance
Besides the factors discussed in Section 7.1.1 which are cross-validated findings from
questionnaires and interviews, some other factors emerged from the in-depth interviews.
Location is identified as an important factor (Section 5.1). This finding supports the
literature claiming that port location is strategically important for port sector and trade
240

development (Lirn et al. 2003; Langen 2004; Song and Yeo 2004; Gordon et al. 2005).
However, as location was identified as uncontrollable, it is rated not so important for
port performance. This finding was validated by the later questionnaire analysis results.
The mean (3.88) of proximity/locations is the second most unimportant among the 15
factors. This finding leads to the conclusion that although location/proximity is critical
for port performance, it is not so important as other factors in terms of improvement due
to its feature of being beyond control.
Logistics demand: During the interviews in Xiamen, one of the most highlighted
factors was the logistics demand from the local and hinterlands economy. As the
Xiamen interviewees were aware, Xiamen does not lack investment in the ports but
lacks cargo sources. Twenty-nine percent of the questionnaire respondents highlighted
that the hinterland economy directly relates to the logistics demand, which critically
influences port performance. The Humber interviewees were proud of their logistics
demand, being located within a 4-hour drive of one quarter of the UK, which provides
sufficient cargoes.
This finding is consistent with Song and Yeos (2004) observation that cargo volume,
which is equivalent to logistics demand, is the third most important factor in port
competitiveness. This is also consistent with Fleming and Hayuth (1994), who note that
port performance is constrained by the regional economy, which means the local,
regional economy and logistics demand influence port performance. Rotterdams
hinterland economy, and the developed countries around the Netherlands (the UK,
France, Germany, Belgium and Denmark), contribute to Rotterdams position as the
door to Europe, which exemplifies that logistics demand influences port performance.
Political stability: Some interviewees raised the issue that Xiamens logistics largely
relies on the political relationship between mainland China and Taiwan because of its
unique location in relation to Taiwan. Section 5.11 presented the finding that political
stability influences port performance. This is why Xiamen has long been promoting a
cross-strait economy. Trade cooperation and the concept of peaceful reunification
(Taiwan and the mainland are supposed to reunify in a peaceful way) have played a
very important role of Xiamen becoming a "window" and "base" for Taiwan. This
finding supports Lirn et al. (2003) who note that political risk is a factor that influences
port selection.

241

Xiamen is a port much more strongly influenced by political issues than any other port
in China, which cannot be overlooked by port managers when considering its
development strategy. Xiamen could not be developed as quickly as some other Chinese
ports, due to the relationship with Taiwan. Xiamen does not benefit from a preferential
policy from Central Government, which would not provide huge investment as it did in
PRD and YRD. However, Xiamen has the potential power to become a regional
transhipment port if the relationship between Taiwan and mainland China improves,
which will benefit Xiamen with more container generation.
Rapid development has taken place in the past two years after the relationship between
Xiamen and Taiwan improved, even in the economic recession. With the opportunity
provided by the Haixi Economic Zone policy starting from 2009, Xiamen is facing the
possibility that Taiwan-funded enterprises will soon move to mainland China on a large
scale. The Humber ports are not facing a similar political issue, being situated in the EU
context. This implies that political factors can be very critical for certain ports under a
particular institutional context.
The finding from Xiamen shows that political stability is important for port
performance and that ports and economy can be improved in a peaceful developing
environment; otherwise they will stagnate. This is consistent with Lirn et al. (2003) who
note the importance of political stability and strongly recommend that political stability
should be included in a broader region research. This finding is also consistent with Lu
and Yang (2006) who find that political stability is notably viewed as the most
important investment criterion.
In terms of land, the space for port expansion is usually scarce because port location is
traditionally near the commercial centre of a city (UNCTAD 2006). The Humber ports,
like many others, are suffering from the lack of land for expansion. In this regard, ports
should reserve enough land space for future development. It can cause the land price in
the port area to become too expensive to maintain logistics activities.
Port ownership: The finding of this research shows that ownership influences port
performance (Section 5.9). The Humber interviewees explained that the Humber ports
do not perform well because they are solely owned by ABP, which has a monopoly.
This finding supports claims in the literature that full port privatisation is not an
effective way to increase port operations efficiency as they solely target profit-seeking
(Brooks and Cullinane 2007; Tongzon and Heng 2005). Tongzon and Heng (2005)
242

suggest that partial port privatisation is a fairly effective way to enhance port
performance (Tongzon and Heng 2005). This implies that port managers should
introduce private finance, private operation and management instead of state funds and
administration, however, the percentage of privatisation should be controlled. A private
ports shareholders would take profit as a primary measure of efficiency, while public
ports are practically accountable to their stakeholders. Some concerns were raised as
sole owner, as a monopoly, would hinder the competition that is conducive to
maintaining low prices. It may lead to sacrificing the consumers interest to maximise
the profit. Humber Interviewee 10 described,
ABP is the pure port owner for over 80% of the ports on the Humber estuary. It has the power of
monopoly in this area. There is a lack of competition.

The unsatisfactory Humber infrastructure is partly due to the monopoly. As the

interviewees explained, new projects in the Humber are very slow to be implemented
due to lack of long-term contracts with customers. The Humber port owners wait for the
customer contract before putting a project in place. The conflict is that ABP would not
start a project without a long-term contract, while the customers would not promise to
use the terminal with a contract unless they were sure about the success of their business.
This situation is quite different from that of Xiamen, where infrastructure investment is
quickly available to implement projects. In Xiamen it is understood that port technical
infrastructure should be available before the customers come and infrastructure is
recognised as one of the most important factors in attracting customers.
As reviewed in the literature, pure public ownership is not a good mode of port
ownership for port development, and this research has found that sole private ownership
is not a good mode, either. According to the government interviewees, it is difficult for
the government to intervene in port management and development of purely private
ports. This gives more convincing evidence that sole private ownership, as a monopoly,
is the main reason for poor performance in terms of expensive charges and poor services.
Owing to monopoly, ABP has a decision-making power, while the customers do not, as
they may have no other ports to go to in this area due to location problems.
Borger et al. (2008) note that private ports do not necessarily charge higher port prices
but may actually charge less than public ports. However, this research shows that if
private ports are owned by a sole owner, it is conducive to port development. To avoid
monopoly, port ownership needs to be diversified.

243

Social culture was identified as one factor influencing port performance from the
Xiamen interviews (Section 5.13). It seems that Xiamen is facing conflicts between
urban culture and commercial interest in developing its logistics. This finding supports
Carter and Peng (1997), who note that in China, logistics is characterised by social and
cultural customs. Port performance is international and cross-cultural in nature (Luo et
al. 2001). Culture, as an aspect of the business environment, varies around the world.
Culture differences influence how ports operate, and this role has not received the
attention that it deserves (Long 2003). This research contributes to the literature with
empirical data on cross-culture logistics showing that culture influences port
performance.
Environmental concerns were identified as one factor influencing port performance
(Section 5.10). Environmental concerns actually influence port performance to some
extent. For example, approval of a new container terminal proposal for Hull was
delayed partly due to environmental concerns. As ports are at the sea-land interface
where environmental sensitivities are high, the issue is more complex and it takes more
time to have a port project approved. This confirms previous assertions that ports face
environmental pressure (UNCTAD 2006).
Serious environmental issues have arisen, coupled with the tremendous economic
growth globally in the past few decades. Consequently, environmental concerns have
become important to ports because of their cross-functional nature. Innovative and
environmentally-friendly logistics ideas are often used. For instance, Wal-Marts crossdocking and elimination of non-value-added activities are environmentally responsible;
use of rail and barge is promoted rather than road haulage and air cargo, which has a
profound impact on the environment.
This finding that environmental concern is an impediment to port project development
contributes to the literature as it has not been addressed in the literature except by the
UN report. However, although environmental concerns temporarily and negatively
influence port performance, they are favourable to sustainable port performance.
History indirectly influences port performance (Section 5.12). Both the Humber and
Xiamen were prosperous for a long period but declined later on. Xiamen declined due to
political relationships with Taiwan while the Humber declined due to decline of the
fishing industry. However, after declining, Xiamen is now developing very fast with

244

Chinas economic boom and the improved relationship between the mainland China and
Taiwan. The Humber has not recovered yet due to a stagnant UK economy.
Historical influences apply not only to Xiamen and the Humber, but also to other port
cities. This influence is obvious as ports developed based on their history. For example,
Rotterdams prosperity today is built on its history starting from the 13th century, when
the port facilities and canals were built. The good communication system in the 18th
century prepared for trade and industry development later on in oil, oil product,
minerals, coal, food, and fertilisers, in Germany, UK, France and Italy.
Figures 7.1 suggests both external and internal factors influence port performance. The
external factors not only influence port performance but also influence internal factors.
For example, government support is an external factor and it is strongly related to
political and legislative factors. It influences port infrastructure by investment and
influences customs services by legislation, while port infrastructure and customs
services are both internal factors and port performance indicators. This section has
discussed findings on the external factors influencing port performance.
7.1.3 A proposed framework for IPA
As there are a number of factors influencing port performance and the factors are
complicated, a comprehensive process shown in Figure 7.2 is proposed to follow to
identify the key factors. That is, the factors should be investigated from different aspects
instead of one by employing IPA, to avoid bias.

Salient
factors

Urgent
factors

(a)

exp. importance vs exp. perf.

(b) exp. importance vs exp. perf.

Excitemt
Factors

Imp.Perf
factors

Uni.perf.
factors

Basic
factors

(c) exp. importance vs imp. perf.

Figure 7. 2 Comprehensive process of getting key factors

Firstly, concentrate/urgent factors are gained by plotting an importance-performance

matrix, using explicit importance and explicit performance weights (Figure 7.2a).
Secondly, to consider competitors or bench markers performance, the IPA matrix is
plotted by using explicit importance and explicit performance difference between focal
ports and other ports (Figure 7.2b). Thirdly, as self-rated importance rating has some
shortcomings (Section 3.6), implicit importance is incorporated to extract the basic
245

factors and determinant attribute of port performance. Three-factor theory is employed

to extract basic, performance and excitement factors to apply different strategies (Figure
7.2c).
7.1.4 Section summary
Section 7.1 has discussed port importance in relation to the supporting literature,
interviews and questionnaire survey results. It has discussed the important factors that
influence port performance.
In terms of questionnaire factors, this section has addressed determinants of port
performance from five aspects: by factor analysis, by mean scores, by two gap analyses
(importance vs. performance, and performance of focal ports vs. that of other ports), by
traditional IPA analysis (explicit importance vs. explicit performance), by revised IPA
employing gap analysis (explicit importance vs. performance difference), and by revised
IPA by employing 3-factor theory (implicit importance vs. explicit performance).
The questionnaire and interviews cross-validate that shipping services, cost, government
support, infrastructure and port services are important factors and most of them are key
internal factors, which were discussed one by one. Other factors identified from the
interviews and questionnaire responses to the open questions were location, logistics
demand (economic), political, social, cultural, historical and environmental factors,
most of which are external factors. The identification of these important external factors
enriches the PESTEL theory by adding a component of historic influence.
This section has addressed Research Objective One to identify the key factors that drive
port performance and choice. The next section will address Research Objective Two to
investigate the differences in importance and performance among these factors.
7.2 Differences in importance and performance among the important factors
7.2.1 Importance difference among the important factors
As discussed in Section 7.1, the results of factor analysis reveal that shipping services,
cost, port services and logistics support are important in descending order for aggregate
factors. The grand mean is used to separate the important factors from unimportant
factors. Figure 7.1c presents the important factors in descending order by explicit means:
shipping services, shipping prices, overall logistics cost, risks, logistics services, safety,
feeder services and government support.

246

For gaps between customer satisfaction and expectation, the importance order was
identified as shipping services, shipping prices, overall logistics cost, government
support, landside links and port charges, as presented in Figure 7.1e. Performance gaps
between focal ports and other ports reveal that attention needs to be paid to (in order):
landside links, shipping services, navigation, government support, feeder services and
port infrastructure.
7.2.2 Performance difference among the factors
Previous studies suggest that ports are dissimilar in performance (Bichou 2007). The
studies have used a variety of methods of performance measurement. For instance,
Trujillo and Nombela (1999) and Carbone and Gouvernal (2007) used the economic and
financial indicators; Gordon et al. (2005) and Bichou (2006) used efficiency
measurement; Wu (2008) and Talley (1996) used infrastructure measurement; Robinson
(2006) and Arvis et al. (2010) used cost measurement; De Langen (2003) used time
measurement.
This research has investigated the factor performance measurement for the combined
sample. The responses to all the questions about performance yielded mean scores
above 3 in a five-point scale. It can be argued that the factor performances fell in the
respondents zone of tolerance, as long as certain conditions were met (Berry and
Parasuraman 1991). To simplify the analysis and discussion, the grand mean is
employed to mark the split of satisfying performance and dissatisfying performance.
After the limit is reached, the customer will become dissatisfied (Ford et al. 1999).
Based on this criterion, the ports perform well in the following factors in descending
order: safety, logistics services, port technical infrastructure, speed of cargo handling,
risks, proximity, shipping services and skills (Figure 7.1d). Most of these are port
services. Factors where performance ranges from very poor to poor are government
support, overall logistics cost, landside links, port charges, navigation, shipping prices
and feeder services. This means that performance on port services is quite satisfying,
while cost and logistics support are not.
The poorly performed factors are reflected in the results of gap analysis. The results of
gap analyses (Sections 6.5.3 and 6.5.5, Figures 7.1e and 7.1f) show that port
stakeholders are not satisfied with their port performance compared with their
expectation and performance of other ports. As sample populations do not appear to

247

obtaining what they expect from their own ports in these factors, this may indicate an
even larger scale problem in the countries involved (Ford et al. 1999).
Section 7.2 has investigated port importance and performance differences among the
factors, which has addressed Research Objective Two. The next section will address
Research Objective Three.
7.3 Variance in factor importance and performance for different ports
Section 7.1 discussed the key factors driving port performance and choice, Section 7.2
investigated the differences in importance and performance among these factors. This
section will analyse how the factor importance and performance vary for different ports.
Figure 7.3 presents an overview of this section.
7.3.1 Variance in factor importance for different ports
Important factors by mean
Sections 6.3, 6.5.1 and Figure 7.3a show the factor importance differences between the
Humber and Xiamen. For factor importance differences, apart from shipping services
and shipping prices, the Humber considered port charges, cargo handling, risks and
safety important while Xiamen considered feeder services, overall costs, logistics
services, landside links and government support important.
For the 15 factors, there are significant differences between the two regions in the
following nine factors in descending order: port charges, skills, government support,
speed of cargo handling, shipping prices, risk, safety, feeders and shipping services. The
Humber scores were significantly higher than Xiamens, except for government support
and feeders. The importance of port charges differs most. This is because in the Humber,
port charges have seriously influenced port performance as a big issue, while Xiamen
port charges were considered reasonable or even lower than the average level in China.
Government support was perceived very differently by the two regions. The Humber
considered it the least important while Xiamen considered it the second most important.
This is because the Humber and Xiamen are in the context of two different institutions.
The Humber is in a developed country, where there is a mature market economy. Ports
are a free market in the UK and the government does not intervene in port management
and development. However, Xiamen is in a developing country, where there is a
transitional

economy

from

planned

248

economy

to

free

market

(c) Major differences (perf. , worse than other ports)

(f) Traditonal IPA matrix (explicit imp.vs. explicit perf.)

Xiamen
F1 Shipping services
F14Government support
F2 Shipping prices
F4 Feeder services
F5 Overall logistics cost
F13 Logistics services
F12 Landside links

F3

Performance

Humber
F1 Shipping services
F2 Shipping prices
F3 Port charges
F7 Risks
F6 Speed of handlings
F8 Safety

Performance

(a) Important factors (F=factor)

F1, F2, F5,

F12

Xiamen imp.

Humber imp.

Humber vs. other ports

Xiamen vs. other ports

F14 Government support

F15 Navigation and land
F9 Port infrastructures
F12 Landside links
F4 Feeder services
F1 Shipping services
F13 Logistics services
Only F10 is better

F12 Landside links

F1 Shipping services
F4 Feeder services
F15 Navigation & land
F6 Speed of handling
F14 Government support
F9 Port infrastructure
Only F8 is better

(g) Revised IPA matrix (explicit imp.vs. explicit perf.)

Xiamen
F8 Safety
F13 Logistcis services
F9 Port infrastructure
F14Government support
F4 Feeder services
F7

Sig. Dif. In factor perf. (HB vs. XM)

(F14 govsupport), F10 proximity, F6 handling speed,
(F8 safety, F9 port technical infrastructure)

Poor performance
Common poor: B3, B5, B12, B15
HB: B4, B14
XM: B2, B10

Performance

(d) (B-C) Humber vs. Xiamen sig. Dif.

Xiamen gap is broader in all following except F8
F10 Proximity
F6 Speed
F1 Shipservices
F11 Skills
(F8 Safety)
F12 Landlinks
F2 Shipgprices

F1, A4, F12,

F14

Xiamen imp.

Humber imp.

(e) Major differences (imp.-perf.)

(h) Revised IPA matrix (explicit imp.vs. implicit imp.)

Implicit imp.

Humber
F6 Speed of handlings
F10Proximity
F8 Safety
F13Logistics services
F1 Shipping services
F7 F11 F2

F1, F3, F8

F2, F3, F6,

F7

Implicit imp.

(b) Good performance factors

Common: B1, B4, B9, B12, B14, B15

HB: B13
XM: B6
Performance

Sig. Dif. In factor imp. (HB vs. XM)

F3 Port charges, F11 skills, (F 14 government support),
F6 speed, F2 shipping prices, F 7 risks, F8 safety,
F4 feeder services, F1 shipping services

F5,
F12

F9,

Humber imp.vs.perf.

Xiamen imp.vs.perf.

F14 Government support

F2 Shipping prices
F3 Port charges
F1 Shipping services
F5 Overall log. Cost
F7 Risks
F12 Landside links

F1 Shipping services
F5 Overall log. Cost
F12Landside links
F2 Shipping prices
F14 Government support
F4 Feeder services
F15 Navigation & land

Xiamen exp. imp.

Humber exp. imp.

Figure 7. 3 Factor importance and performance comparison for different ports

249

Common: 1, 2, 5, 12, 14
HB: 3, 7
XM: 4, 15

economy. The Chinese government still controls and intervenes heavily in ports,
especially the strategic issues. For example, the Chinese government intervened more
deeply into the economy in 2009 to assist recovery from the economic recession by a
series of preferential policies. Logistics is one of the top 10 industry sectors earmarked
by the Chinese government for revitalisation. For example, in response to the financial
crisis and to support the port industry to overcome the difficulties, in 2008, Chinas
central government decided to invest 4,000 billion RMB mainly in infrastructure to
stimulate the domestic demand. In 2009, 1.8 trillion RMB was allocated to stimulate
infrastructure projects.
In contrast, the Humber interview and questionnaire respondents did not see much
government support for logistics. Figures 7.3a, 7.3c, 7.3d and 7.3e reveal that The
Humber and Xiamen have significantly different views on the importance of
government support influencing port performance. The Xiamen interview interviewees
highlighted the importance of government support and considered it as the most
influential forces on port performance (Section 5.2). As one interviewee stated, the most
important factor influencing performance development in China is government support.
This finding was validated by the results of the questionnaire survey (Section 6.5.1).
Song and Yeo (2004) find that Chinas port facilities were insufficient because Chinese
ports developed very late. However, with government intervention, great changes have
happened to Chinese ports. Facilities have increased fast since the 1970s, when Chinas
container transport started in Tianjin. According to the Chinese Ministry of
Communications (MOC), by the end of 2008, Chinas total port cargo throughput had
amounted to 7 billion tons and 128m TEUs, with 413 ports and 31,000 berths (194
times the number in 1949 when China was founded, 1416 of which can handle cargoes
over 10,000MT). This was nearly 700 times more than what they were 60 years ago.
The annual increase of the port handling capacity reached 500 million tons (average
annual growth rate of 11.5%), which is equivalent to building a new Shanghai port
(www.moc.gov.cn).
Chinese ports provide strong support to China's national economy and foreign trade.
According to AAPA (2009), 7 out of the top 10 ports in cargo volumes and 6 out of the
top 10 ports in container TEUs were from China, which implies that Chinas ports and
port facilities are no longer backward and insufficient. The achievement is inseparable
from the government support. The government intervention in the market economy is
obvious and is still going on to some extent.
250

Xiamens local government also shows its support to the Xiamen infrastructure. Xiamen
is No. 7 among Chinas ports in terms of TEUs. The interview interviewees noted that
the Chinese government contributes to Xiamens satisfactory infrastructure. Xiamens
city transport and the port infrastructure are good (Section 5.3 and 6.5.2). The
government has been making efforts to improve the poor landside links. For example,
three railways are under construction, and the Fuxia express rail came into operation in
January 2010. Xiamen government support is also reflected by FDI attraction (Wang
and Chen 2008).
Comparing the Humber and Xiamen reactions to the poor physical infrastructure,
Xiamen responded much faster to the market requirements, pushed by the government.
In Xiamen, the government, port managers and the private investors will put money in
place once a project is approved. Xiamen interviewees expressed positive attitudes
towards the government investment and strategy (Section 5.2).
The finding that the Humber did not take the government role seriously while Xiamen
highly appreciated it supports the literature with empirical evidence that government
authorities in UK and China have played very different roles (Wang and Slack 2004).
The authors note that the UK government authorities' power has gradually been reduced
to nurture a more liberal business environment, while in China, central and local
governments still strongly intervene in port development and terminal operations.
Availability of shipping services was considered significantly different between the
Humber and Xiamen, because the Humber shipping services were not considered
satisfying. The interviewees hoped this could be improved so that customers could have
more frequent services for their cargoes. As for Xiamen, it has already attracted about
100 shipping lines and the frequency is good. As for feeder services, as Xiamen has
overinvested in port infrastructure, it has sufficient port capacity for future development.
However, due to constraints of limited local economy and hinterlands, feeder services
are important to bring in more cargoes from inland areas and increase the transhipment
volume in Xiamen. In contrast, in the Humber area, as its hinterlands are not broad, the
feeder services are not so important. Instead, the Humber ports function as a feeder to
some big European ports.
Important factors from gap analysis
Performance gap analysis between focal ports and other ports (Section 6.5.3) shows that
both regions have big gaps in government support, landside links, feeders, navigation,
251

port infrastructure, feeder services and shipping services. Additionally, big gaps exist in
logistics services for the Humber and speed of cargo handling for Xiamen. Figure 7.3c
presents the gap difference in descending order. The big gaps indicate that both regions
do not satisfy customers compared with other ports.
Importance-performance gap analysis (Section 6.5.5 and Figure 7.3e) shows that both
regions have big gaps in government support, shipping prices, shipping services, overall
logistics cost and landside links. Additionally, big gaps exist in port charges and risks in
the Humber and feeder services and navigation in Xiamen. The gaps indicated that
given the importance of these factors, their mean performance scores were potentially
problematic. This would lead to customer dissatisfaction. The respondents had a
perceptual problem with their ports and special attention needs paying to those factors
with big gaps as their performance rankings were much lower than their expectations.
The only areas where respondents appeared to obtain what they expected were
proximity in the Humber and safety & skills in Xiamen.
The two types of analyses were conducted to investigate gaps. They explain to some
extent why the Humber and Xiamen ports cannot attract many customers and why
customers would rather go to other ports instead of the Humber and Xiamen.
IPA: urgent, salient and basic factors
Section 6.5.5A and Figure 7.3f show the traditional IPA results from analysing explicit
importance and explicit performance. Port charges is the Humbers urgent factor, while
landside links, overall logistics cost, shipping prices and shipping services are urgent
factors for Xiamen. Revised IPA results from analysing explicit importance against
explicit performance difference (Section 6.5.5B and Figure 7.3g) show that the
Humbers salient factors are shipping services, port charges and port safety, while
Xiamens salient factors are shipping services, feeder services, landside links and
government support.
Sections 6.5.5C and Figure 7.3h show that shipping prices, port charges, speed, risks are
basic factors for the Humber, while landside links, overall logistics cost, shipping prices
and port technical infrastructure are basic factors for Xiamen. They should be
maintained at the basic level of performance, because they are unimportant if their
performances are delivered above a certain threshold level; but they become critical if
their performance falls short. These factors can suddenly turn into determinant attributes
with high importance and low performance. On the contrary, the Humbers excitement
252

factors are skills, navigation, logistics services and proximity, while Xiamens
excitement factors are skills, port charges, safety and navigation. They are orderwinning criteria. They enhance satisfaction if performance is high. If the performance is
low, overall satisfaction is not negatively impacted. The remaining factors are
performance factors. Their importance changes depending on their performance level.
Satisfaction with these factors increases linearly as performance of these factors is
improved.
Section summary
The research findings of importance by mean, gap analysis, traditional IPA and revised
IPAs have shown that different regions under different economic, social, political,
cultural and environmental contexts have different urgent, salient and basic factors that
affect port performance. Although different methods and techniques generate different
important factors, all the factors are within the range of important factors above with
means above grand means. Most of the important factors are found to be internal factors,
although they are influenced by external factors.
7.3.2 Variance in factor performance for different ports
This research finds that it is difficult to compare port performance by throughput
between the Humber and Xiamen, because freight is made up of different commodities.
The finding confirms the claim of Slack (2007). The Humber deals with many
inevitably weighty bulk cargoes while Xiamen handles both bulk materials and general
cargoes, and Xiamen handles many more containers than the Humber. However,
although throughput is difficult to compare, the factor performances are comparable by
subjective measures.
Section 6.5.2, Figure 7.3b and Table 7.1 present the performance difference between the
Humber and Xiamen. Both port regions have good performance in safety, risks and
logistics services. In addition, the Humber ports have good performance in speed,
proximity and shipping services; while Xiamen ports are good in port technical
infrastructure, government support and feeder services.
Both the Humber and Xiamen have poor performance in port charges, overall logistics
cost, landside links and navigation. Apart from these, the Humber ports have poor
performance in feeder services and government support, while Xiamen ports have poor
performance in proximity and shipping prices (Section 6.5.2).

253

Table 7. 1 Performance issues of the Humber and Xiamen

Shipping services

The Humber

Xiamen

Poorer than other ports

Poorer than other ports

Shipping prices

Poor, Sections 5.6 and 6.5.2

Port charges

Expensive port charges, Sections 5.6 and 6.5.2

Feeder services

Not sufficient, Sections 5.5 and 6.5.2

Poor, Sections 5.6 and 6.5.2

Overall logistics cost

Poor, Sections 5.6 and 6.5.2

Speed of cargo handling

Poorer than other ports

Port infrastructure

Poor port facilities, Sections 5. 3.1 and 6.5.2

Proximity

Poor, Sections 5.1 and 6.5.2

Skills

Poor but not very important, Sections 5. 8 and 6.5.2

Landside links

Poor, Sections 5. 4 and 6.5.2

Poor, Sections 5.4 and 6.5.2

Government support

Poor, Sections 5. 2 and 6.5.2

Poorer than other ports

Navigation

Lack deep water, insufficient land for future development,

Sections 5.3 and 6.5.2
Poor port image, Sections 5.14, environment constraints
(Section 5.10)

Others

Poor custom service (Section 5.8)

Poor logistics demand (Section 5.7)
Overinvestment to cause high cost
(Section 5.2.2)

The Humber and Xiamen have significant performance differences in the following
factors in descending order: government support, proximity, speed of cargo handling,
safety and port infrastructure. Xiamen performed much better than the Humber in
government support, safety, port infrastructure and carriers, whereas the Humber
performed much better than Xiamen in proximity and handling speed.
Government support differs most. The government support performance of the Humber
is the poorest and that of Xiamen is number 4 out of the 15 factors. This finding
validates interview results in Section 5.2. Government support of the Humber port
importance, performance and performance difference compared with other ports were
all identified as the poorest among the 15 factors. Poor government support was further
identified as one reason for poor infrastructure and a slow planning process for the
Humber.
Proximity is the factor with the second most difference, as the Humbers hinterland is
not huge and it does not have competitors nearby while Xiamens local economy is poor,
and there is much overlapping of hinterlands with other ports such as Ningbo, Fuzhou,
Zhangzhou, Quanzhou, Linde, or even Shanghai, Shenzhen and Guangzhou.
For port infrastructure, as the interview results and questionnaire analysis show, the
Humbers port infrastructure is poor in terms of port natural conditions and port
facilities/equipment, such as channel navigation, water depth, old gantry and cranes.
However, Xiamen has deep water, modern facilities and good port connectivity. The
interviews indicate that Xiamen has overinvested in port infrastructure, and in the
questionnaire analysis, its performance ranking was No. 3 out of the 15 factors. This

254

finding is not consistent with literature asserting that Xiamen should invest heavily in
port infrastructure (Wu et al. 2008).
Regarding port services such as speed of cargo handling, the Humber has professional
management, as the ports in UK developed much earlier than those in China. Xiamen
started developing ports in the late 1970s, when the Humber was already very efficient
in cargo handling. With regard to port safety, as Xiamen takes safety as a high criterion
for port image, safety is well controlled with high standards. The overall services in
Xiamen are good, except customs services, based on the general comments from
interviews and questionnaire survey results. The performance of Xiamen logistics
services was ranked number 2 out of the 15 factors.
Port charges of the Humber are much higher than those of Xiamen. This is because the
Humber ports are solely owned by ABP, which results in monopoly. Lambertides and
Louca (2008), who examine the relationships between ownership structure and
operating performance for European maritime firms, find that operating performance is
related to the ownership. Specifically, performance is positively related to foreign held
shares, investment held shares and portfolio held shares. In the Humber, monopoly is
the main reason for high port charges and big problems with infrastructure investment
(Section 5.9). This finding confirms and supports the S-C-P theory that structure
impacts performance (Scherer 1980; Bain 1956).
Xiamen port ownership is more diversified, which results in better investment from
various entities. However, it was noted that port operation needs integrated management
when ownership is diversified. Currently, Xiamen ports are prominently characterised
by "oligopoly" competition with un-integrated services. For sustainable port
development, the diversified port operators are often not competing rationally. In order
to solve the problem, a scheme is needed to balance the different operators interests.
The investors are advised to separate from the operations management team.
A state-owned holding company may act as the core power to form a "port group"
which integrates the port operations management. The different investors would share
the equity but not be directly involved in the management, so that specialization and
economies of scales can be achieved, market competition can be reconstructed, nonrational competition can be eliminated and the port charges can go back to a reasonable
rate to improve the overall profitability of the port and enhance its overall strength.

255

For the Humber, as addressed in Section 5.6, many local manufacturers, retailers and
distributors would choose the southern English ports rather than the Humber ports for
import and export, even though the Humber ports are closer to them. Marks & Spencer
has chosen Bradford as the home of its new distribution centre, where the M61 and M62
are easily accessed. Next, Tesco, IKEA, Excel, Faberge and B&Q have placed their
distribution centres in Doncaster, home to a number of major distribution centres, due to
its proximity to major urban centres and motorway/rail infrastructure. The Humber
ports do not manage to attract the big companies. Smith & Nephew do not use the
Humber ports but Felixstowe; Reckitt & Benckiser use Doncaster as a distribution
centre and would choose rail and other modes rather than sea shipment from Hull. Arco,
as the biggest retailer in the labour and personal protection sector in the UK, does not
use the Humber but Felixstowe. The interviewees explained that it is more convenient,
quicker and cheaper for them to import and export from the South.
The major retailers did not choose the Humber estuary as their distribution centre. This
may be due to the Humber ports high charges (Sections 5.2.6 and 6.5.2), poor port
infrastructure and hinterland connected infrastructure (poor landside links), no deep-sea
water, insufficient feeder services, poor facilities, poor skills, insufficient land, weak
government support, and better services at lower cost provided by other ports (e.g.
Tesco opened a new Teesport Distribution Centre in Middlesbrough). Moreover, the
Humber does not benefit from a strong local economy, as the Humber estuary itself
does not support sufficient logistics demand, not being a manufacturing base and not
being close to the customers. As the big supermarkets are particularly market-driven,
and neither the population nor heavy industry is dense in the Humber, they would not
choose the Humber as the location for their distribution centres.
But why did some customers still choose the Humber and Xiamen instead of other ports,
even though their port performance was poorer than that of other ports? Firstly, it is
because the Humber/Xiamen have comparatively better performance in some areas,
which were analysed in Section 6.5.2 as the top 5 performance factors. Secondly, the
customers would make the decision on port choice based on many factors. Location is
an important element for them to consider. The Humbers proximity is the only factor
with better performance than other ports. Thirdly, it depends on whether the customers
have alternative choices. If they do not find better alternative ports after considering the
relevant factors, they choose the Humber and Xiamen.

256

For Xiamen, the high overall logistics costs and port charges might be due to
overinvestment in port facilities. Highly efficient terminals used to be the best workable
strategy to defeat competitors. However, it is no longer the best strategy, as proved by
European ports. Notteboom and Winkelmans (2001) noted that inimitable and durable
core competences with cost leadership or differentiation (by offering specific port
services in the market niches) remain the strategy to achieve competitiveness. This is
also in line with Porters Strategy of Core Competitiveness (Porter 1980).
The questionnaire analysis results show significant differences between the performance
difference of the Humber and Xiamen in proximity, speed of cargo handling, shipping
services, skills, safety, landside links and shipping prices in descending order. Xiamen
gaps are much wider than those of the Humber in all the factors except safety (Figure
7.3d). This implies that Xiamen has bigger potential problems and face a more
competitive environment.
7.3.3 Differences between factor importance and performance
Sections 6.5.5 and 7.3.1 presented the significant differences between factor importance
and performance. For the Humber, the finding shows statistically significant differences
in 11 factors in descending order: government support, shipping prices, port charges,
shipping services, overall cost, risks, landside links, safety, navigation, infrastructure
and handling speed. For Xiamen, the finding shows significant differences in 13 factors
in descending order: shipping services, overall cost, landside links, shipping prices,
government support, feeder services, navigation, risks, port charges, proximity, speed of
handling. The top five factors are regarded as the most problematic. The identification
of specific problematic areas can be improved to help the port managers develop a more
positive view of their ports. The findings of importance-performance gap analysis
validate the above findings with supporting mean differences.
Section 7.3 has analysed and discussed the factor importance and performance
difference for different ports. The next section will discuss Research Objective Four.
7.4 The role of a port hinterland in port performance and choice
The results from interviews (Section 5.7) show that hinterlands play an important role in
port performance. This finding is validated by responses to the open questions in the
questionnaire (Section 6.5.1). It supports Slacks (2007) claim that hinterlands have a
clear impact on the performance of port development, as seaport performance is
257

strongly entwined with the development of hinterlands which have cargo access to the
ports. It also supports Garcia-Alonso and Sanchez-Soriano (2009) that hinterlands
contribute to port selection and supports Pettit and Beresford (2008) that hinterlands
contribute to port prosperity.
The scope of port hinterlands is dynamic. The broader the hinterlands are, the larger the
cargo volume available. Port hinterlands change in relation to infrastructure and
competitors nearby. More options of landside links connecting ports and other inland
places would make cargo transport more convenient. The better quality the landside
infrastructure is, the more convenient the transport connectivity is. If there is any port
nearby, it would share the hinterlands and compete for cargo volume. Notteboom and
Rodrigue (2005) note that port regionalization can enlarge port hinterlands so that more
cargo sources are available to improve port performance. Portugals fall and
Rotterdams rise (Section 3.4) exemplify that ports would flourish or decline depending
on whether the hinterlands are large or small, and whether their economy is strong or
weak.
Containerization requires larger hinterlands that provide more cargoes and it has
enhanced the port-hinterland relationships. The scope of the hinterland varies due to
containerization and development of port regionalisation, such as the appearance of
Oresund region in Scandinavia and ASEAN (OLaughlin et al. 1993). The hinterlands
of Xiamen are enlarging with the development of Xiamen ports and better landside links
(Section 5.7). In turn, the expanding hinterlands benefit port performance with larger
volume and better throughput.
Because the location of Xiamen is between two big port regions - YRD and PRD, its
hinterland is squeezed by the ports in the two regions. The customers would prefer ports
in YRD and PRD, as they can provide better services at lower costs due to economies of
scale. Moreover, Xiamens local economy is weak; its hinterland is constrained by poor
landside infrastructure; the close provinces economy is weak. These indicate that
Xiamens hinterland is weak. Consequently, the logistics demand of the port is weak.
This would influence Xiamens port performance.
Due to the constraints of limited hinterlands, Xiamen is not expected to target becoming
an international transhipment port, because it is close to three big and mature container
port clusters: PRD, YRD and Kaohsiung. Table 7.2 presents the throughput of the main
container ports close to Xiamen in 2009.
258

Table 7. 2 Throughput of main container ports close to Xiamen in 2009

Port Name
Throughput (million TEU)
Shanghai
25.00
Ningbo
10.50
Shenzhen
18.25
Guangzhou 11.19
Xiamen
4.68
Source: adapted from AAPA

World rank
3
9
5
7
19

This implies that developing Xiamen into a transhipment port is improper. Developing
an international transhipment port may face unexpected risks such as natural port
conditions, the movement of world economic trade centre, and the local political
influence. These uncertain factors may cause the ports to fall idle. This finding provides
port managers with evidence that irrational investment may not be good for Xiamens
port performance.
In the case of the Humber hinterlands, the interviewees and questionnaire respondents
were happy with its proximity (sections 5.2.1 and 6.5.2), which implies that Humber
respondents are happy with the cargo supply from their hinterlands, although the
Humbers local manufacturing and local economy is weak. The Humber has a big
volume of cargoes coming from the potential hinterlands in West Yorkshire and
Scotland. This will further improve the Humber port performance.
7.5 Usefulness of key findings for port stakeholders
The findings of this research have a number of implications for port managers in the
Humber and Xiamen. Matzler et al. (2003) propose strategies by employing three-factor
theory. Their strategies are followed for different types of factors and strategies for the
Humber and Xiamen are provided in Table 7.3.
In general, the following implications emerge for the management of port customer
satisfaction: fulfil all basic factors, be competitive regarding performance factors and
stand out for excitement factors (Maltzler et al. 2003). For the Humber, the basic factors
are speed of cargo handling, risks, shipping prices and port charges. They should be
maintained at the basic level of performance. On the contrary, navigation, logistics
services, proximity and skills are order-winning criteria. They need to stand-out.
Satisfaction with the remaining factors increases linearly as their performance is
improved. For Xiamen, landside links and overall cost should be maintained at the basic
level of performance. Navigation, port safety, port charges and skills should be treated
as order-winning criteria. Satisfaction with the remaining factors increases linearly as
their performance is improved.
259

Table 7. 3 Strategies of the Humber and Xiamen subject to revised IPA results by 3-factor theory
Port
Factor group

The Humber

Excitement factor
(high implicit importance
Vs
low
explicit
importance)

Performance
Factor (high explicit imp.
Vs high imp. Imp;
low exp. Imp.vs low imp.
Imp)
Basic factor
(high exp. Imp. Vs.
Low imp. Imp.)

Xiamen

Excitement
factor

Performance
factor
Basic factor

Factors
navigation

Our
performance
poor

Other ports
performance
poor

Implication
neglected opportunities

logistics services

good

good

head-to-head competition

proximity

good

poor

competitive advantage

skills
shipping services
landside links
overall cost
feeders
technical infrastructure
government support
speed
risks
shipping prices
port charges
navigation
safety
port charges
skills
government support
logistics services
shipping prices
feeders
technical infrastructure
shipping services
speed
proximity
risks
landside links
overall cost

good
good
poor
poor
poor
poor
poor
good
good
good
poor
good
good
poor
good
good
good
poor
good
good
poor
poor
poor
good
poor
poor

poor
good
good
poor
good
good
poor
good
poor
poor
good
good
good
poor
poor
poor
good
good
good
good
poor
good
poor
poor
good
poor

competitive advantage
head-to-head competition
competitive disadvantage
neglected opportunities
competitive disadvantage
competitive disadvantage
neglected opportunities
No advantage
No competition
No competition
No market entry possible
head-to-head competition
head-to-head competition
neglected opportunities
competitive advantage
competitive advantage
head-to-head competition
competitive disadvantage
head-to-head competition
head-to-head competition
neglected opportunities
competitive disadvantage
neglected opportunities
competitive advantage
No market entry possible
false competition

As discussed earlier in Section 7.1.3, traditional IPA and revised IPA by gap analysis
should also be considered together with revised IPA by three-factor theory to set
priorities for improvement and resource allocation, and to consider competitors
performance as well. In this research, other ports performance is assumed as
competitors performance.
Table 7. 4 The Humber and Xiamen implications for port managers
Port
Humber

Xiamen

Finding of issues
Monopoly
Poor government support
Expensive port charges

Implications
Build more ports; diversify port ownership
Improve planning process; government investment in infrastructure
Diversify port ownership, diversify investment; make the port charges transparent;
benchmarking; improving port facilities to reduce labour cost; government intervene

Poor port infrastructure

Poor landside links
Others

Improve infrastructure; diversify investment

Promote intermodalism
Build logistics distribution centres, attract more cargoes, improve image of the Humber;
improving shipping services
Improve transport infrastructure to connect Xiamen and hinterlands; improve
intermodalism; information system improvement

Poor landside
infrastructure
Poor logistics demand

Enlarge hinterlands by landside links and dry ports; improve local and hinterland
economy;

Poor customs services

Political issue to Taiwan
Lacking strategic scheme
Poor shipping services
Others

Improve the customs services

Make use of the location advantage of Xiamen to Taiwan
Develop a strategic logistics scheme
Cooperate with shipping lines; improve domestic feeder services
Promote regional transhipment hub; seek constant government support;

260

To put the strategy in Table 7.3 into practice, as well as considering the integrated
process of Figure 7.2, the Humber and Xiamen port managers are supposed to perform
the activities as shown in Table 7.4.
Diversify the Humber port ownership
For the Humber, to cope with the issue of monopoly, one way might be to build more
ports in the Humber estuary by different port owners, so that there will be competition
among different ports. This is because competition can improve port services and
reduce port charges at the rational level. The other way might be to diversify the current
port ownership so that more parties can be involved in the port management. The
Humber can learn from Xiamen with regard to port ownership diversification. As sole
ownership negatively influences the port infrastructure (Section 5.3), the Humber needs
to allow diversified investment in port infrastructure to expand the container terminals,
purchase advanced quayside equipment, and assign more quayside cranes to a vessel so
that both landside transport infrastructures and port facilities can be improved for better
port performance. Ownership diversification could attract more social capital, improve
the port efficiency and services, and reduce port operation risks (Notteboom et al. 2000;
Cullinane et al. 2002).
Improve the Humber government support and port infrastructure
Interview analysis shows that the relationship between government support and port
development is loose in the developed countries (Section 5.2). The Humber is facing
difficulties in a slow planning process and poor port infrastructure. The government
should intervene and help it out with investment and proper guidance to solve the
financial problem.
In response to the extension of the European Union, increasing trade with the North Sea
and Baltic countries and greater competitiveness within the UK's port industry, the
Humber ports facilities need continual development to accommodate projected
increases in trade and changes in trading patterns. Adequate port facilities in the
Humber are fundamental to the continual prosperity of the local and regional economy.
However, due to lack of investment, the port facilities are not satisfactory.
Government investment in port facilities and transport infrastructure could improve port
efficiency to benefit the region. Chinas central government and local government
exemplify government support for infrastructure investment. Chinese port investment
currently comes from several sources: central and local government finance, loans from
261

foreign government, securities finance, financial institutions and domestic-foreign joint

investment. The Humber could obtain the finance for the port infrastructure investment
using similar approaches. Besides these, it can also get finance by project financing to
raise international capital.
As Xiamen performs very well in government support to port performance, the Humber
may learn from Xiamen about how the government supports the improvement of port
performance. Chinas and Koreas experiences in government support (Section 3.3.1) to
port facilities and landside links imply that governments in other countries can learn
from them for diversified investment, either from domestic or foreign private
investment or public investment, to improve port infrastructure.
Reduce the Humber port charges
The Humber could learn from Xiamen to reduce expensive port charges. Port
performance cost could also be reduced by improving port facilities. This is what China
has been doing in the past 20 years and what Vietnam is doing now. Port efficiency and
competitiveness will result in less labour cost to reduce port charges as well. The
charges could be reduced based on the benchmark of other ports. Additionally,
government intervention is important to stipulate the guide price, standardize the market
order, and prevent vicious competition in logistics cost between ports. For instance,
Chinas ports have standard port charges (known as THC), which are set by the
Ministry of Communication for all Chinese ports. Port charges are also visible to the
public via websites and at the port service building (Section 5.6).
Promote intermodal links for both of the Humber and Xiamen ports
As Hayuth (1987) noted, intermodalism offers a choice of routes, ports of call and
modes of transport by an intermodal operator, freight forwarders or large shippers. Port
users cannot efficiently move cargo without adequate inter-modal links, which would
result in congestion, risks and higher cost (Tongzon 2009).
There are no intermodal links to the Humber ports. Intermodalism may be promoted as
it can enable modern ports to compete for far-reaching cargoes with far-distant
counterparts in terms of hub, transhipment and transport network of sea-road, sea-river
or sea-rail, or mixed with sea, river, road and rail at any intersection (Section 2.4.5). The
Humber needs to improve its landside links as they are found to be poor (Section 5.4).
On the Northern Bank, the road should be improved on A63 Castle Street and Hedon
Road. The rail network needs building to link Hull port, not only for coal, but also for
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other cargoes and containers. On the Southern Bank, the A160 and A180 should be
improved to increase the capability of transport from Grimsby and Immingham to other
destinations. The rail facilities should also be improved linking Immingham, which
takes 25% of the whole countrys rail freight.
It is necessary to enlarge Xiamens hinterlands by intermodal links. Although
investment is not a problem, the scheme of the logistics hub needs thoughtful planning
with regard to access to the busy ports.
This research has found that neither the Humber nor Xiamen has real intermodal
transportation (Section 5.4) to improve transport efficiency. The port managers should
promote an efficient intermodal system with active participation of shippers, carriers
and 3PLs. The transport infrastructure, port technical infrastructure and information
system should gradually become an integrated logistics service system to promote
intermodalism and develop port performance, as Islam et al. (2005) noted that
consignors and consignees should all have access to door-to-door services.
Build logistics distribution centres in the Humber
Setting up distribution centres at ports instead of inland is one approach in port-centric
logistics, which is more efficient as international freights or domestic sea transport
freight would come through ports first (Falkner 2006). For instance, ASDA Wal-Mart
opened a 350,000 sq ft import centre at Teesport in 2006 and has saved more than two
million road miles by adopting the port-centric concept. Tesco opened its 1.2 million
square foot import centre at Teesport in August 2009, creating 800 jobs. These are
examples of the location selection for supermarket distribution centres. The Humber
needs to attract distributors/retailers by employing the concept of port-centric logistics,
for creating employment and bringing local economy improvement.
Improve other factors for the Humber
Apart from the above aspects, it can be seen that the Humber needs to improve other
factors. Firstly, the Humber has potential hinterlands cargo resources to support port
development. As addressed in interview analysis in Chapter 5, about 60% of the cargos
handled through the UK southern ports are actually from and to the Northern region. To
relieve the pressure of congestion in the southern ports such as Felixstowe and
Southampton, the Humber ports can take over a great volume of cargoes that are closer
to the Humber to increase port performance by throughput. Secondly, as analysed from
interview and questionnaire data and discussed earlier, the Humber shipping services
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and feeder services need improving. Thirdly, the port image needs enhancing, as port
reputation is a component of port competitiveness (Brooks 1985).
Strengthen Xiamens landside links and other infrastructures
Xiamens logistics demand is hindered by the poor infrastructure (interview analysis
Section 5.4 and questionnaire analysis 6.5.2). There is a need to lay a solid foundation
of infrastructure for the development of port performance, including integration of port
resources, information system and transport infrastructure. Xiamen does not lack berths
or other facilities. On the contrary, the ports are actually underutilised due to the lack of
cargo resources (Section 5.7). This supports Wu and Huang (2008) who proposed
developing port-adjacent industries, integrating social and harbour logistics resources,
and investing on ICT system and transport infrastructure. Xiamen is the second most
overinvested port in China. This finding is not consistent with literature asserting that
Xiamen should invest heavily in port infrastructure (Wu et al. 2008). This finding will
benefit practitioners to integrate its port facilities to reduce port cost.
Increase logistics demand
Both Xiamens local economy and hinterland economy are weak, according to interview
analysis, and there is poor corresponding physical infrastructure, as explained earlier.
This research finding shows that the hinterland should be enlarged by promoting
intermodalism, dry ports and improving transport infrastructure to link hinterlands.
The concept of a dry port might enlarge the hinterlands. The infrastructure investment
could be pushed to Jiangxi, Hunan and Fujian Province, where the dry port would be
a very effective way to get more cargo sources (Harding and Juhel 1997) and in line
with Chinas plan of overall economic development with the rise of development in
central and western China.
Ports need to cooperate with shippers to control and secure the cargos from hinterlands.
Cooperation with shippers would expand the distribution system and make good use of
hinterland logistics parks, so that logistics demand can be increased.
Improve the customs services
Song and Yeo (2004) identify that service level plays the fourth most important role in
port competitiveness. Xiamen is very poor in customs services (Section 5.8), which
needs to be improved for better international trade and port performance. The
government can promote paperless customs clearance and make Xiamen a fully
functional e-port. The efficiency of customs clearance requires significant and urgent
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improvement by means of the extension of service hours, simplifying the

documentation, and simplifying the inspection process so that shippers can save time in
customs declaration and clearance (Arvis et al. 2010).
Enhance Xiamen shipping services
Compared with other ports, Xiamen has a performance gap in shipping services (section
6.5.2). In order to attract more cargoes, the port needs to attract more shipping lines to
come with better shipping frequency and more destinations. It needs to cooperate with
shipping lines to control the seaside hinterlands by means of renting the terminals to
shipping lines or building special docks in cooperation with shipping lines. Xiamen
could also expand the feeder transportation from Fuzhou, Shantou, Wenzhou to broaden
the hinterlands of supply channels. For feeder services, domestic container transport has
the advantage of saving time (5-7days less than by truck), cost (100 RMB/t), less
damage and loss (www.cosco.com).
Make use of the location advantage of Xiamen to Taiwan
As Xiamen has a unique location advantage in relation to Taiwan, it should play a
strategic role in developing a cooperative relationship with Taiwan. Such cooperation
would include partnership with Taiwan and making Taiwan part of its hinterlands. From
a logistics and economic point of view, firstly, Xiamen should try to attract cargoes
along the coastal line and the Yangtze River, tranship cargoes to Taiwan via Xiamen,
and distribute the cargo from Taiwan to other ports in mainland China through the
above routes. Secondly, Xiamen should establish a distribution centre for cargoes
from/to Taiwan; and open up liner ships as shuttle services between Xiamen and
Taiwan. The sea-rail intermodal business that has obvious advantages of both
convenience and economy could be explored and expanded. The cargoes from China
central and western provinces could go to Taiwan by a rail-sea intermodal system, and
vice versa. Thus, it is necessary to have a proprietary distribution centre for Taiwan.
Promote Xiamen regional transhipment hub
With the decline of Taiwans economy, the position of Kaohsiung is declining.
Meanwhile mainland Chinas economy has been growing, which offers a good
opportunity for Xiamen to overtake Kaohsiung to become a regional transhipment hub.
Xiamen should be positioned as a regional port, subject to strategic analysis of the
coastal ports along Chinas south-eastern coast. In this region, due to its location
between YRD and PRD, the hinterlands are squeezed by the two deltas, which has
resulted in weak logistics demand. Hence, it is not feasible to build an international
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transhipment port. This was also validated by the interview analysis (Section 5.2).
However, it would be appropriate to build it up as a regional transhipment port, which is
a very competitive business. Transhipment could be cheaper than direct call services if
the transhipment port was carefully chosen (Lirn 2002).
The reasons for Xiamen to become a regional transhipment port are: 1.Comparing other
ports nearby, Fuzhou is the most competitive port, but Xiamen has better facilities than
Fuzhou. 2. Xiamen has more experience in port operations and services. 3. Xiamen has
a better location in relation to Taiwan than Fuzhou. 4. Xiamen can promote a strategy of
port alliance to achieve a win-win situation. It could include Zhangzhou and Quanzhou
as its feeder ports, develop good co-operation with them, avoid fierce competition,
duplicate port construction, and form an integrated force to improve competitiveness.
Seek constant government support
As the Chinese institutional system is still in the process of transformation from a
planning economy to a market economy, the government still plays a very important
role in resource allocation. In China, government intervention in port performance is
popularly considered a good thing. In Xiamen, government has encouraged the
integration of port resources, port restructure and co-operation between port enterprises.
However, Xiamen has not developed so fast as other cities in the economic zone, and
needs to seek constant government support for port development. Practically, the
Xiamen government should learn from the Singapore government on tax incentives;
facilitating international trade through an efficient customs administration, security,
good sanitation and business environment; and providing foreign logistics companies
with easy access to funds (Tongzon 2007).
In response to the financial crisis, China has launched the "Top Ten Industry Promotion
Plan". The logistics and information sector is ranked among the targets for promotion.
From the perspective of national strategy to develop logistics and information industry,
the State highlights the establishment of a modern logistics system, reduced costs, and
improved efficiency, which offers the logistics industry significant opportunities to
achieve leapfrog development. The ten industries are concentrated in the manufacturing
sector, which needs logistics support and has brought a great opportunity for ports to
improve. Xiamen should take this opportunity to revitalize port performance and
increase input of government policy support. Xiamen should make good use of the
policy of Haixi Economic Zone to attract cargo from Taiwan, attract more companies to
relocate here and attract more transhipment cargoes.
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To these ends, Xiamen should set up logistics parks and bonded logistics parks, which
are often closely related to Free Trade Zones (FTZs), areas where companies may ship
products to postpone or reduce customs duties or taxes (Grant et al. 2006). Introducing
FTZs for the international logistics industry is therefore an effective way to attract
international business. This will add value to the import and export business and
provide customers with the multi-functional services of inspection, customs clearance,
cargo receiving, distribution and processing to create an open, interoperable-based
logistics service platform. Four logistics parks and 13 logistics centres in Xiamen are
either in use, under construction, or on the agenda. The programme is developing very
fast in order for Xiamen to keep pace with other developed cities. Their practical use
rather than mere conceptualisation requires attention.
Develop a strategic logistics scheme
Xiamen lacks a strategic logistics scheme. For example, the port areas are not separated
from the residential areas, which causes congestion and risks (section 5.2); and the port
facilities are overinvested and not integrated.
7.6 Difference between findings and the literature
Most of the findings enrich the literature with empirical evidence. However, some
findings are not consistent with the literature and they add knowledge to the literature. 1.
Song and Yeo (2004) find that traditional factors such as location and port facilities
rather than service quality are important. However, this research finds that shipping
services, shipping prices and cost are very important for port performance. This
indicates that service quality-related factors rather than traditional factors are important.
The inconsistency implies that as time goes on, service quality becomes increasingly
more important than traditional factors. 2. Tongzon and Heng (2005) note that 0.67-1
privatization is very effective for port performance. Borger et al. (2008) find that private
ports do not necessarily charge higher port prices but actually charge less than public
ports. However, this research has found that 100% pure privatization with sole
ownership is not conducive to effective port charges. As the Humbers port charges are
high, and some customers would not choose the Humber ports. 3. Location has been
recognised as very important for port performance by many researchers such as Lirn et
al. (2003), de Langen (2004), Gordon et al. (2005). This research has found that location
is comparatively unimportant for port performance improvement, as it is beyond a
ports control. 4. Cargo volume is an important port competitive factor but Song and
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Yeo (2004) consider it beyond a ports control. This research shows that cargo volume
can be manipulated by means of improving the local and hinterland economy and
expanding the hinterlands by improving quality of transport infrastructure, an
intermodal or dry port. Cargo volume can also be increased by promoting
manufacturers to produce more types of products, increasing the production volume and
improving feeder services, based on interview analysis. 5. Xiamen is the No. 2
overinvested port in China. This finding is not consistent with literature asserting that
Xiamen should invest heavily in port infrastructure (Wu et al. 2008). Song and Yeo
(2004) identify that Chinas port infrastructure is insufficient. This research has found
that this is no longer true as port infrastructure has been improved greatly in recent
years. This finding has updated the literature as China has been improving its
infrastructure. It is important for port managers to avoid further overinvestment and
result in high logistics cost. 6. The literature did not include such factors as location,
politics, culture and history into empirical research, while this research collected
empirical data to enrich the literature.
Chapter 7 has provided a discussion of the findings of this research and covered the
main findings and research objectives. Chapter 8 contains conclusions and
recommendations.

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8. CONCLUSION AND RECOMMENDATIONS

This thesis has investigated the development of port performance and logistics in two
European and Asian ports through mixed methods, and examined various factors
determining port performance. This chapter concludes the research in four sections. The
first section summarises key findings of this research. The second section restates the
five research objectives and summarizes how they were met. The third section
highlights the research contribution. The fourth section discusses the limitations of this
research and provides recommendations for future research.
8.1 Key findings
Increasing international trade draws attention to the importance of port performance,
and port efficiency is a relevant determinant of a countrys competitiveness (Sanchez et
al. 2003). As ports perform differently, identifying key factors influencing port
performance is important to improve performance.
As reviewed in Chapters 2 and 3, few researchers have engaged a variety of key port
stakeholders as interviewees and provide comprehensive views on port performance to
avoid response bias. Some research has been conducted on business performance, port
performance, criteria for port competition and choice, but only a few empirical
comparative studies have been carried out on the key factors influencing port
performance, and there is a lack of literature that includes both internal and external
factors in a single study. They do not prioritise the different factors, either. Few
empirical researchers have compared the factors influencing port performance in Asia
and Europe, either. Moreover, IPA has not been applied to port research yet to improve
port service quality. This research is a comparative study to identify the determinants of
port performance and investigate the differences in importance and performance among
the factors. It has also analysed how the factor importance and performance vary for
different ports and analysed the role a port hinterland could play in port performance
and choice. Finally, it has illustrated usefulness of key findings for port stakeholders.
Apart from some external factors gleaned from interviews, the investigated construct of
questionnaire factors influencing port performance and choice consisted of 15 factors
based on the literature, which were categorised into five aggregate factors: shipping
services, cost, port services, logistics support and others. The reliability and validity of
this construct was verified by the literature and Phase 1 interviews. The research
strategy was implemented using mixed methods to collect both qualitative and
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quantitative data in two port regions (China and the UK) and in two phases. Phase 1
included semi-structured in-depth interviews. Phase 2 included questionnaire-based
surveys which were distributed to port experts of 500 organisations with a response rate
of 50.8%.
Interviews were conducted to obtain insightful understanding of various factors.
Thematic analyses were employed for interview analysis. The process of data reduction,
data display and conclusion drawn and verification was followed iteratively. Factor
importance and performance of the focal ports and performance of other ports were
measured by questionnaire respondents. A variety of techniques were employed for the
data analysis by employing SPSS. Factor analysis was used to reduce the fifteen
questionnaire factors to five aggregate factors. Their importance was distinguished by
factor loadings. Means were used to assess the factor importance and performance in
descending order. Gap analyses were used to identify the difference between customer
satisfaction and expectation, and to identify the difference between performance of focal
ports and that of other ports. Traditional IPAs were used to identify factors for urgent
action by port managers; revised IPAs using explicit importance against performance
difference derived salient factors; revised IPAs by explicit importance against implicit
importance were used to identify basic factors that should be treated cautiously. A
variety of statistical validation and significance tests were conducted to analyse the data.
The different techniques generated different research findings from the combined
sample and from the separate samples.
8.1.1 Key findings from the combined sample
This section presents key findings from the combined sample. Firstly, port services, cost,
logistics support, shipping services and others were identified as aggregate factors by
factor analysis. The first four factors explained a higher percentage of total variance.
According to the means of the aggregate factors, shipping services, cost, port services
and logistics support are important in descending order of importance.
Secondly, explicit means of factor importance show that shipping services, shipping
prices, overall logistics cost, risks, logistics services, safety, feeder services,
government support and port charges are important factors in descending order of
importance. This finding implies that priority needs to be considered according to the
importance ranking when other conditions are the same.

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Thirdly, gap analyses reveal that big gaps between expectation and satisfaction exist in
shipping services, shipping prices, overall logistics cost, government support, landside
links, port charges; and big performance gaps exist between focal ports and other ports
in landside links, shipping services, navigation, government support, feeder services and
port technical infrastructure. The big gaps indicate that improvement needs to be made
to narrow the gaps with other ports and to satisfy port customers.
Fourthly, traditional IPA results identify that shipping prices, port charges, feeder
services, overall logistics cost and government support are factors with high importance
and low performance. Immediate actions need taking on these factors. The revised IPA
results employing gap analysis find that shipping services, feeder services and
government support are salient factors compared with other ports. As these factors fall
in the quadrant of urgent actions, immediate improvement needs making.
Fifthly, the revised IPA employing 3-factor theory identifies that port charges, risks and
overall logistics cost are basic factors. They should be maintained at the basic level of
performance, otherwise they become critical if their performance falls short and
suddenly turn into determinant attributes. Skills, proximity, government support,
navigation, and logistics services are excitement factors. They enhance satisfaction, so
they should stand out. The remaining factors are performance factors. Their satisfaction
increases linearly as their performance is improved.
Sixthly, from interview analyses, some external factors have been identified as
important that influence port performance, such as economic, social, political, cultural
and environmental factors. These external factors are usually qualitative factors and
they influence internal factors and port performance as well, for example, government
support would influence quality of infrastructure; economic wealth is closely related to
logistics demand which directly influences shipping services.
Lastly, port performance is generally acceptable, as the factor mean scores are above 3
on a 5-point Likert scale. Specifically, ports perform well in descending order in the
following factors: safety, logistics services, port technical infrastructure, speed of cargo
handling, risks, proximity, shipping services and skills. Most of them are port services.
The poor performance factors are government support, overall logistics cost, landside
links, port charges, navigation, shipping prices and feeder services. This finding
indicates that performances on port services are quite satisfying, while performances on
cost and logistics support are not.
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It should be acknowledged that different methods of data analysis resulted in

identification of different factors influencing or determining port performance. However,
the urgent factors, salient factors and basic factors are all reasonable and explainable, as
they were investigated from different perspectives.
8.1.2 Key findings from the analysis of separate data of the Humber and Xiamen
This section presents key findings from separate samples. This research establishes that
different ports have different factors influencing their port performance, and ports
perform differently because of different external (institutional, social cultural, economic,
legislative and environmental) environments and internal (natural conditions,
management and services) factors.
Factor importance was investigated first. The results from factor analysis show that the
Humber considers that aggregate factors of cost and port services are more important
than logistics support while Xiamen considers that logistics support is the second most
important factor, next to shipping services. The Humber consider the importance of
shipping services, shipping prices, port charges, risks, speed of cargo handling and
safety in descending order, while Xiamen consider the importance of shipping services,
government support, shipping prices, feeder services, overall logistics cost, logistics
services and landside links in descending order.
For factor importance comparison between the Humber and Xiamen, the t-test results
show significant differences between nine out of the fifteen factors. Port charges, skills,
government support, handling speed and shipping prices are the top five significantly
different factors in descending order. The Humber analysis shows that all the identified
factors are more important when compared to Xiamen except government support.
Regarding port performance, the Humber performances of speed of cargo handling,
proximity, safety, logistics services and shipping services are in descending order, while
Xiamen performances of safety, logistics services, port infrastructure, government
support and feeder services are in descending order. There are significant differences
between the two port regions in terms of government support, proximity, handling
speed, safety and port infrastructure in descending order. The performance of Xiamen in
government support, safety and port infrastructure is better than that of the Humber,
while the performance of the Humber in proximity and handling speed is much better
than that of Xiamen.

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Figure 7.3e shows that there are significant differences between the Humber importance
and performance in government support, shipping prices, port charges, shipping
services, overall logistics cost, risks and landside links in descending order. Figure 7.3e
also shows that there are significant differences between Xiamen importance and
performance in shipping services, overall logistics cost, landside links, shipping prices,
government support, feeder services and navigation & land in descending order.
The importance-performance gap analysis reveals considerable gaps between factor
performance and expectation. The gaps indicate perceptual problems with the
respondents focal ports. Shipping services (both deep-sea and feeder services) and
costs are factors with which both the Humber and Xiamen users are dissatisfied. The
performance gap analysis shows that respondents are also dissatisfied with the
performance of their focal ports compared with other ports in government support,
landside links, feeders, navigation, port infrastructure and shipping services.
Additionally, Xiamen has an extra gap: speed of cargo handling. The results show that
neither of these sample ports seems to have achieved what the customers expect, and
neither of them has better performance than other ports. This may indicate an even
larger scale problem in both countries involved.
Comparing the performance gap differences, it is found that the gaps of Xiamen are
much wider than the gaps of the Humber in proximity, speed of cargo handling,
shipping services, skills, landside links and shipping prices, while the gap for the
Humber is much wider than the gap for Xiamen in safety.
Port charges are the Humbers most urgent factor, while shipping services, shipping
prices, overall logistics cost and landside links are Xiamens most urgent factors, with
high importance and low performance, which need immediate action for performance
improvement. Shipping services, port charges and safety are the Humbers salient
factors and shipping services, feeder services, landside links and government support
are Xiamens salient factors, compared with the performance of other ports. They need
improvement as they have high importance but poorer performance than other ports.
According to the revised IPA results, the Humbers basic factors are identified as
shipping prices, port charges, speed and risks, while Xiamens basic factors are
identified as overall logistics cost and landside links. These basic factors must meet the
minimum requirements of customers; otherwise, they will cause customer
dissatisfaction.
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The descending order of the Humbers explicit importance is shipping services,

shipping prices, port charges, risks and speed of cargo handling, while that of the
Humbers implicit importance is skills, safety, logistics services, navigation, and
proximity. The findings confirm the view of Matzler et al. (2003), who identify
considerable differences between the results of explicit importance and implicit
importance. The results from Xiamen lead to the same conclusion.
Besides the questionnaire factors, other factors causing differences in port performance
are identified through the interviews, as explained in Section 8.1.1. The factor
differences in such factors as political stability, logistics demand in local region and
hinterlands, social culture, port ownership, environment concerns and history have
given rise to performance differences. These factors were not included in the
questionnaire to obtain quantified data, because of the subjective nature of the data.
Wu and Huang (2008) identified that factors influencing Xiamen port performances are
local industrial development supporting total value of imports and exports, total
investment in fixed assets supporting construction of berth and port transport channel
and social consumption. They limited the factors to port facilities, transport
infrastructure and local economy. The current research has confirmed their findings and
enriched the literature with more comprehensive factors.
Government support is the biggest difference, as the two countries have different
institutional systems. China is undergoing transition from planning economy to market
economy and there is considerable government intervention in port development, while
the UK is a pure market economy in which the government does not control or manage
ports. The difference in government support (F14) results in a different quality of
infrastructure including port facilities, information systems (F9) and transport
infrastructure (F12) due to investment differences. The Chinese government is much
more involved in port infrastructure investment and landside infrastructure investment.
Investment diversification has enabled Xiamen to improve infrastructure more rapidly.
Political influence is very strong for Xiamens port performance while it is not an issue
for the Humber. The stability of the relationship between mainland China and Taiwan
plays a significant role in Xiamens port performance.
The reasons why the two regions perform so differently are because they vary in terms
of the following factors: geographical location with different natural conditions such as
navigation and hinterland areas, history and social culture embedded with the port
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development, political stability and port ownership, and institutional systems that
provide different levels of support to port performance by the government (see
interview analysis results in Chapter 5). In addition, the management level and logistics
skills (F11) have influence on port internal operations efficiency (F6-F9).
The Humber has high port charges because of complete privatisation, which implies that
port ownership influences port performance. Port privatisation does not necessarily lead
to lower costs, and this research shows that complete privatisation in the Humber has
resulted in higher port charges. This finding is not consistent with the claim of Tongzon
and Heng (2005) who state that port privatisation is an effective way to enhance port
performance. On the other hand, the case of Xiamen indicates that ownership
diversification and partial privatisation at certain level may be more efficient for port
charges.
Briefly, in terms of factors influencing port performance, both internal factors and
external factors play an important role. The external factors may have impact on internal
factors and influence port performance directly or indirectly, while internal factors
directly influence or reflect port performance.
8.2 Achievement of five research objectives
This section summarizes the five research objectives and how they were met.
8.2.1 Key factors that drive port performance and choice
Factors driving port performance and choice were initially identified by the literature
review, then confirmed by phase 1 semi-structured interviews, and finally validated by
phase 2 questionnaire surveys. Data were collected from two port regions from five
groups of key port stakeholders. Questionnaire respondents scored their local factor
importance and performance and other ports performance. Factor analysis, mean
comparison, gap analysis, t-tests, IPAs were employed for combined data. The factors
were categorized and prioritised by questionnaire analysis so that key factors were
extracted.
Factors from interviews are more qualitative and external oriented, while factors derived
from questionnaire surveys are more quantitative and internal oriented. The key external
factors were identified as location, government support, logistics demand, political,
social, cultural, historical and environmental factors. The key internal factors were
identified as shipping services, cost, infrastructure (both transport infrastructure and
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port technical infrastructure), port services (speed, risks and safety). The external factors
influence internal factors that influence port performance (Section 7.1).
8.2.2 Differences in importance and performance among the factors
Based on the literature, a questionnaire survey was designed. Respondents evaluated the
factor importance and performance. Differences in importance and performance among
the factors were measured, compared and prioritised based on mean, and results were
presented in descending order. Then this objective was achieved by insightful
discussion, supported by the research findings and the literature (Section 7.2).
8.2.3 How the factor importance and performance vary for different ports
The same questionnaire was employed but separate data from the Humber and Xiamen
were used. Data were analysed by t-tests, gap analysis, IPAs, Kruskal-Wallis H tests,
plus descriptive analysis such as mean comparison, standard deviation, skewness and
kurtosis. This was to achieve the objective of identifying how the factor importance and
performance vary for different ports (Section 7.3).
8.2.4 The role of a port hinterland in port performance and choice
Interview questions on the role of port hinterland in port performance and choice were
developed from the literature review, then the questions were raised to the interviewees.
Rich data from the interviewees were gained. The data were analysed by a process of
data reduction, data displays, conclusion drawing and verification. This was followed
by discussions of findings with the support of the literature. This research found that a
port hinterland plays an important role in port performance in terms of cargo volume.
The finding was validated by responses to questionnaire open questions.
8.2.5 Usefulness of the key findings for port stakeholders
Based on the findings from in-depth semi-structured interviews and structured
questionnaire survey results, following the discussions over the above four research
objectives, usefulness of the key findings were derived for the Humber and Xiamen port
stakeholders.
It has been suggested that the Humber port managers should diversify port ownership to
reduce cost, encourage diversified investment for infrastructure improvement; obtain
financial assistance from government and private business to improve the
infrastructures (port physical infrastructure, information system and landside
infrastructure inclusive); improve government support to reduce port charges; get more
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seaside links to increase the shipping frequency and destinations, promote intermodal
links, build logistics distribution centres, attract more cargoes from the enlarging
hinterland; and enhance the Humber image. The Humber local authorities could
proactively lobby the Highway Agencies and central government for infrastructure
improvement.
Xiamen port managers need to improve custom services, seek continuous government
support, improve the hinterlands connected infrastructure, increase logistics demand,
improve the relationship with Taiwan, enhance the seaside links, reduce cost by
intermodalism and setting up dry ports in inland China, build logistics parks and
make use of the bonded logistics park. Compared with the Humber, Xiamen can learn
from the Humbers efficient customs service, improve logistics demand and speed-up
cargo handling.
8.3 Research contribution
The findings allow practitioners, consultants and policymakers to examine the
determinants of port performance in different port regions and improve port
performance accordingly.
8.3.1 Contributions to academic knowledge
Maritime transport is one of the worlds most important international industries
(Mangan et al. 2008), but the research on cross-culture logistics has lagged behind
considerably (Luo et al. 2001). This might be due to the difficulty of language barriers
and access difficulties of conducting cross-cultural logistics research. This research has
attempted to fill this gap and contributed to the literature as follows:
Firstly, this research has filled the gap of cross-culture comparison of port performance
and influencing factors by empirical research between two ports in Europe and Asia.
This unique research allows ports in different regions to learn from each other.
Moreover, it contributes to the literature and allows academics and practitioners to see
cross-cultural difference in terms of how ports perform differently and how people
choose ports in the very different contexts. The factors influencing port performance
and choice were insightfully investigated, identified, analysed and compared through
rich combined data and separate data. As studying one port region limits the research
scope, and it is also very restrictive, this research has included more than one port

277

region for comparison and analysis for generic applicability in the methodology and
findings.
Secondly, this research has contributed to the literature with a comprehensive review of
up to date port performance indicators and factors that influence port performance. This
contribution was firstly reflected in Chapter 3, and then the literature was enhanced with
valid findings from the empirical research. Various studies have addressed the factors
that influence business performance, but there is scant empirical research on the subject
of which key factors determine port performance. This research has empirically
identified the aggregate factors that drive port performance: port services, cost, shipping
services and logistics support. It has also contributed to knowledge that logistics
demand, location and port ownership are important for port development with empirical
evidence, as these variables have often been discussed theoretically but not empirically.
Thirdly, the results that the Humber and Xiamen have different important factors
influencing port performance confirm the claim of Ford et al. (1999) that trying to
develop a single model of important factors to apply in a cross-cultural context might be
a mistake. It has enriched the literature. This finding implies that the strategy should
change accordingly when the environment changes.
Fourthly, this is an empirical research to apply stakeholder theory to the port sector by
involving all key port stakeholders as interviewees in the target sampling frame in a
single study, to limit interviewee bias. There was scant literature on factors influencing
port performance from the perspectives of various port stakeholders, although port
managers have always had an interest in factors that drive port performance.
Specifically, this research collected data from carriers, PSPs, cargo interests, port
managers and other port stakeholders, who form the port participants and customers
(Murphy and Daley 1994; Bichou and Gray 2004). This has filled a research gap by
including all key port stakeholders as interviewees in a single research.
The findings from respondent group analysis show that differences exist in importance
of shipping prices and port infrastructure, and in performance of speed of cargo
handling and port infrastructure. The analysis results reveal no significant differences
between the different groups among the remaining 26 out of 30 factors of importance
and performance. This finding is debatable against the claim of Murphy et al. (1992)
that different groups of stakeholders would have different views on port performance.
The researcher would argue that different stakeholders evaluate some factors differently
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but they score many factors with no significant difference. The finding implies that
further investigations are needed to test group differences.
Fifthly, IPA has been widely applied for prioritising service improvements in different
research areas, such as manufacturing, operations and engineering services,
freight/highway transportation, financial services, education and hospitals. This research
has extended the body of knowledge by showing that IPA can be applied to port sector
for port performance research. A comprehensive process to identify key factors
influencing port performance was presented in Figure 7.2 by IPA, which means that
traditional IPA (explicit importance against explicit importance) is employed to identify
factors for urgent actions; revised IPA by employing gap analysis (explicit importance
against explicit performance difference) is employed to identify salient factors and
revised IPA by employing 3-factor theory (explicit importance against implicit
importance) is used to identify basic factors.
Basic factors, performance factors and excitement factors were identified from both
combined sample and separate samples employing IPA. This is an application and
testing of 3-factor theory in the port sector. This research has filled the gap by applying
IPA as an effective tool for strategic decision making in port management to identify
the key factors influencing port performance. The empirical research provides evidence
that IPA is an extremely valuable tool to help in setting priorities for service
improvement, in a highly competitive service market of ports. Knowledge is improved
by applying 3-factor theory to the port sector and the 15 selected factors are categorised
into three groups.
The resulting models and importance-performance grids can be strategically relevant for
any port competitor. This is a promising tool for port managers, since it can examine
past, current, and potential customers perceptions and it allows for possible corrective
actions to improve perceptual problems. This could help a ports service providers to
improve its image. IPA also allows the ports to identify potential problems through a
periodic use of this methodology before they actually become critical.
Revised IPA was effectively employed in the port sector. It is not only a contribution to
knowledge, but also a contribution to methods of data analysis.
Sixthly, port ownership was identified as an important factor influencing port
performance. This finding is a theory test of structure-conduct-performance (SCP), that

279

is, port structure influences port performance. It also confirms the claim of Wiegmans et
al. (2008) that portfolio influences port choice.
Seventhly, little research has been conducted on factors influencing Xiamen port
performance except Wu and Huang (2008) and few previous studies were found on
factors influencing the Humber port performance. This research has identified a much
wider range of influencing factors other than infrastructure and local economy
improvement for Xiamen, and it has identified influencing factors for the Humber,
which has implications for port managers of both ports, who need to take those factors
seriously, develop corresponding strategies and take relevant actions to improve port
performance.
Eighthly, actions of competitors are acknowledged as an important factor for strategy
design in management science. However, little empirical research has been undertaken
to measure this factor in port selection (Guy and Urli 2006). This research has
conducted empirical work to measure the factor performance of any other port the
respondent is familiar with, which is assumed to reflect the competitors performance. It
means that this research has filled a gap in the literature within this context.
Ninthly, this research has not only identified factors influencing port performance, but
also classified, measured, prioritised and compared the factors. Factor prioritisation and
comparison allow port stakeholders to take different strategies to cope with factors with
different importance and factors with different performance.
Tenthly, the findings from this research could possibly be generalized and made
applicable to other ports, eventually for identifying port development policies and
strategies, as the Humber ports are representative of private ports, feeder ports and
developed western ports, while Xiamen represents regional ports with diversified
ownerships in an eastern developing country.
Lastly, this research has enhanced the literature by empirical evidence that such
qualitative factors as political, government support, culture and history are important
factors influencing port performance.
The findings that are consistent with the literature have provided support for the
literature. Those findings that are not consistent with the literature (such as whether
location is important for port performance improvement, whether pure privatization is
conducive to port charges, whether infrastructure can be controlled or not and whether

280

cargo volume can be increased, see Section 7.6) enrich the literature by looking at these
factors from different perspectives.
8.3.2 Contributions to port management
One purpose of this research was to aid port managers in the practical task of
formulating their operations strategy for port performance and development. This
research yields practical insights for managers to improve port performance. This
practical relevance is valuable because of port regionalization, as a consequence of
increasing competition between port regions. This research contributes to port managers
understanding of how to improve port performance with specific recommendations for
each port region (Section 7.6).
Although government authorities cannot do much about history and social culture, they
can influence and lobby the government for supporting port performance. Government
can even influence the institutional system to a certain degree. The most influential
actions for them to take are planning and helping to carry out regional port development
schemes, providing financial support for infrastructure improvement and coordinating
with the various port stakeholders to improve port performance.
The port authorities can provide logistics support on landside links, feeder services and
land support. They can improve the management level to help with port performance in
terms of reducing port charges, improving port service quality on cargo handling,
warehousing and freight forwarding, risk, safety and skills. They can do more for port
facilities improvement, ICT system employment and lobbying for connections with the
port landside hinterlands. The practitioners can increase cargo volume by improving
landside infrastructure to connect hinterland, by promoting dry port and by enhancing
local manufacturing.
Identifying and quantifying factors influencing port performance allow port managers to
prioritise and compare the importance of various factors, so that they can treat the
factors differently based on the different importance level. The more important factors
can be taken more seriously than less important factors to avoid waste of resources.
PSPs can improve port performance in terms of speed of cargo handling, risks, safety,
port technical infrastructures and logistics services.

281

8.3.3 Contributions to research methodology

Previous studies ended up providing vague understanding of port performance and its
determinants as they employed a single dominant method. This research aimed to offer
honest and realistic insights into the process of research. Specifically, it added a
research based on mixed methods. Qualitative (inductive) interviews and quantitative
(deductive) questionnaires were employed in this research to collect the primary data,
enhancing the research validity. In the empirical research, data were collected through a
comprehensive and large-scale questionnaire survey and extensive interviews with
broad port stakeholders in two different port regions of Asia and Europe.
The mixed methods (interviews first, followed by questionnaires) were employed to
examine the factors that influence port performance and to explore the similarities and
differences of port performance in the developed and developing countries. The use of
mixed methods in data collection contributes to enriching the research methods in
logistics and supply chain management, an area where positivism dominates. It
exemplified that methodological pluralism is possible and practical, and the
interpretative approach can offer rich insight into complex problems.
This research has contributed insights into how to obtain a higher response rate by emails and communications. The respondents should first be experts who have
knowledge of the questions the researcher is interested in. Then, communication skills
are important to convince the potential respondents to accept interviews and complete
the questionnaire. Thirdly, e-mail was found to be an effective and efficient technique to
obtain a quicker and more efficient response than by traditional post. This research was
conducted internationally to obtain invaluable data solely by the researcher herself,
which reduced bias and enhanced the data validity.
8.4 Limitations of this research and recommendations for future research
This research has produced a number of relevant and interesting insights into the factors
that determine port performance in two ports of Asia and Europe through a rigorous
research process as described in Chapter 4. However, some limitations exist in this
research, and it is important to recognise these limitations in relation to data as well as
to the methodology used. In response to the limitations, recommendations for future
research will be made. The limitations and recommendations are listed as follows:

282

It should be noted first of all that due to time, finance and access constraints, the
population for this research was limited only to the Humber estuary in UK ports and
Xiamen Chinese ports.
To generalise findings, future studies may extend the research areas to broader and more
randomised samples of more ports, covering more ports worldwide, as the strength of
theory can be improved by utilising multiple examples (Yin 2009).
The response rate was different for different regions and different groups of companies.
It is therefore difficult to derive any significant conclusions about the non-response bias
in terms of response rate by company category.
As this research adopted a cross-sectional design and cross-sectional data, the findings
only provide an analysis of a current situation, as opposed to a longitudinal approach to
explore if there are any causal relationships between factor importance and port
performance and if the relationships change over time.
The data used in this research were created from a survey and based on the perceptions
of respondents, as opposed to absolute measures. Future studies could be designed to
develop constructs that are based on absolute values and thus avoid subjectiveness in
response. However, developing the constructs would be complicated, and respondents
may not know the answers to the questions, or may not be willing to disclose the
information requested.
Difficulty was faced in obtaining financial data. In Xiamen, due to cultural influences,
some interviewees did not feel free to talk during the interviews, as the Chinese have a
culture of not speaking out if they are not sure whether they should do so. Future
research should carefully consider cultural and linguistic differences, particularly when
the research areas are in both developed and developing countries, although in this
study the research process was carefully managed by back translation by professionals
and bi-linguists to avoid potential ambiguity.

283

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APPENDIX: QUESTIONNAIRE

305

APPENDIX: QUESTIONNAIRE

Developing Logistics Excellence in the

Humbers Hinterland
This survey is being undertaken to build knowledge and gain insights into the logistics capabilities
of the Humbers ports and its hinterland. The research is directed by Professor Chandra Lalwani,
Academic Director, and Professor John Mangan, Visiting Professor, and conducted by Ms
Mengying Feng, PhD Scholar. The confidentiality of individual contributions is assured. The
questionnaire is for academic research purposes only. Please be assured you will not receive any
targeted mailings arising from your completion of this questionnaire. A summary of our
analysis, which we hope to have completed by September 2009, will be sent to all respondents (you
can fill in your contact details in Section D below).
Completion of this questionnaire should take just five minutes of your time we would value your
input very much.

Section A Identifying factors of importance

How important do you regard the following factors which concern the performance of the
Humbers ports and the logistics infrastructure in the hinterland please just tick one score for
each factor (1 = not at all important to 5 = very important).
1 2 3 4 5
1 Availability of shipping services (destinations, frequencies, etc)
2 Price of shipping services
3 Port/ terminal handling, warehousing and other charges
4 Feeder connections to the deepsea ports and the major shipping lines
5 Port / shipping service is on the cheapest overall route to the destination
6 Speed of port cargo handling
7 Congestion, delays and other risks
8 Port/ terminal security and safety
9 Technical infrastructure of the port (handling equipment, ICT, etc)
10 Proximity of the port to your customers and / or sources of supply
11 Availability of skilled employees in the region
12 Quality of landside transport links (inter-modal links)
13 Availability and quality of logistics services (warehousing, freight
forwarding, cargo handling, etc)
14 Government supports for logistics activities and new developments in
the region
15 Depth of navigation channel
Are there other factors which you believe are important in terms of the performance of the
Humbers ports and the logistics infrastructure in the hinterland?

305

Section B Scoring the performance of the Humbers ports and the logistics
infrastructure in the hinterland
Taking the same list of factors from Section A, now please score the performance of each of these
factors in the case of the Humber and its hinterland (1 = the Humber performs really badly with
regard to this factor, to 5 = the Humber performs really well with regard to this factor).
1 2 3 4 5
1 Availability of shipping services (destinations, frequencies, etc)
2 Price of shipping services
3 Port/ terminal handling, warehousing and other charges
4 Feeder connections to the deepsea ports and the major shipping lines
5 Port / shipping service is on the cheapest overall route to the destination
6 Speed of port cargo handling
7 Congestion, delays and other risks
8 Port/ terminal security and safety
9 Technical infrastructure of the port (handling equipment, ICT, etc)
10 Proximity of the port to your customers and / or sources of supply
11 Availability of skilled employees in the region
12 Quality of landside transport links (inter-modal links)
13 Availability and quality of logistics services (warehousing, freight
forwarding, cargo handling, etc)
14 Government supports for logistics activities and new developments in
the region
15 Depth of navigation channel
If you have identified any other factors please again identify these and score them:

Section C Scoring the performance of any other port and its hinterland
logistics infrastructure
Now please identify one other port area (other than the Humber) which you are most familiar with.
Again taking the same list of factors now please score the performance of each of these factors in
the case of that port and its hinterland (1 = the port performs really badly with regard to this factor,
to 5 = the port performs really well with regard to this factor).
Please identify the port:

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1
2
3
4
5
6
7
8
9
10
11
12
13

Availability of shipping services (destinations, frequencies, etc)

Price of shipping services
Port/ terminal handling, warehousing and other charges
Feeder connections to the deepsea ports and the major shipping lines
Port / shipping service is on the cheapest overall route to the destination
Speed of port cargo handling
Congestion, delays and other risks
Port/ terminal security and safety
Technical infrastructure of the port (handling equipment, ICT, etc)
Proximity of the port to your customers and / or sources of supply
Availability of skilled employees in the region
Quality of landside transport links (inter-modal links)
Availability and quality of logistics services (warehousing, freight
forwarding, cargo handling, etc)
14 Government supports for logistics activities and new developments in
the region
15 Depth of navigation channel
If you have identified any other factors please again identify them and score them with
regard to this other port:

Please add any comments you wish to make concerning any of the issues considered in this
questionnaire:

Section D - Respondent Profile (or append a business card)

Respondent Name:
Job Title: Manager
Company Name:
Telephone:
Email:

If you have any queries about this survey please contact:

Mengying Feng
elinorfmy116@hotmail.com
0782 8517 613
Thank you for your assistance.

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